KONICA MINOLTA CSR REPORT

Transcription

1 KONICA MINOLTA CSR REPORT 2015

2 Contents Editorial Policy Contents / Editorial Policy Introduction Message from the President Overview of the Konica Minolta Group Konica Minolta s CSR Special Feature 1 Sharing Green Innovation Sharing Environmental Management Technology and Know-how with Customers, Suppliers, and Society Special Feature 2 Customer-centric Innovation Facing Customer Problems to Create Satisfaction and Happiness The Konica Minolta CSR Report is published to inform all stakeholders about the Group s corporate social responsibility initiatives. With sections addressing each type of stakeholder, the report discusses the Group s progress and provides information about new initiatives and goals for the company, focusing on issues identified as being very important to society and having a substantial impact on the Group s business. To facilitate communication with stakeholders around the world, the report is published in five languages: Japanese, English, Chinese, German, and French. Report Boundary This report covers Konica Minolta, Inc. and its consolidated subsidiaries. When data is given on a specific subset of companies, the boundary is separately indicated. Note: In this report, Konica Minolta refers to the Konica Minolta Group. Konica Minolta, Inc. refers to Konica Minolta, Inc. alone. Exercising Responsibility for the Global Environment Green Products Green Factories Green Marketing Reporting Period In principle, the report covers activities from April 1, 2014 to March 31, Some sections may include information on earlier initiatives or more recent activities. In this report, fiscal 2014 refers to the fiscal year starting April 1, 2014 and ending March 31, Earning the Confidence of Customers Assuring Product Safety and Preventing Quality-related Problems Increasing Customer Satisfaction Cooperating with Business Partners Promoting CSR throughout the Supply Chain Growing Together with Our Employees Leveraging and Developing Diverse Human Resources Fostering a Culture Committed to Health-First Promoting Occupational Health and Safety Hand-in-Hand with Society Implementing Social Contribution Activities around the World Publication Date August 2015 (Next report: scheduled for August 2016; previous report: August 2014) For Further Information More detailed information about the Group s CSR activities is available at: Page on the website Relevant information available on the website The documents below are available for download at: document_download.html Company Brochure CSR Report Environmental Report Annual Report Intellectual Property Report Reference Guidelines The 4th edition (G4) of the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines GRI / ISO26000 / United Nations Global Compact Content Indices Management System Data Expert Opinion of Konica Minolta s CSR Report External Assurance Disclaimer In addition to facts about past or present circumstances, this report contains descriptions of the Group s current plans and projections for the future. These descriptions are based on information that is currently available and have been deemed reasonable based on the Group s current status. The Group s actual performance could differ from its predictions due to future changes in the business environment. 1 KONICA MINOLTA CSR REPORT 2015

3 Introduction C r e a t i n g N e w Va l u e f o r a S u s t a i n a b l e W o r l d Konica Minolta s mission is The Creation of New Value. The company exists for this very purpose: to use creative ideas to deliver tangible new value in order to resolve the challenges faced by customers and the broader society. In order for companies to be sustainable in the times ahead, they will have to contribute to the resolution of social challenges while continuing to grow. In other words, they will be required to create value for both the company and society. In cooperation with its stakeholders around the globe, Konica Minolta aims to establish itself as a company that is vital to society by continuing to create new value that brings innovation to the world. Konica Minolta Philosophy KONICA MINOLTA CSR REPORT

4 Message from the President Creating New Value by Pursuing Both the Resolution of Social Issues and Growth as a Company The Value Creation Konica Minolta Strives For Corporate value is the combination of shareholder value and social value. I believe that there are two components to that social value: CSR management and the social significance of the company s business itself. It is my conviction as a businessperson that we must increase Konica Minolta s social value in order to achieve its management vision of establishing itself as a global company that is vital to society. Since its formation, Konica Minolta has experienced continuous growth under its management philosophy, The Creation of New Value. In order for us to continue this sustainable growth over the next 50 or 100 years, it is important that we not only create economic value, but also societal value. This is why we are a company that takes social responsibility seriously and commits itself to contributing to the protection of the global environment and the resolution of social issues not a company that just provides the products and services required by customers and returns the profit obtained to shareholders and employees. All of Konica Minolta s global businesses aim to provide new value to customers and society through innovative products and services. Konica Minolta s fundamental growth strategy is the creation of new value by offering solutions to diverse challenges through its technological and business innovations. Based on this approach, we have initiated the Medium Term Business Plan, TRANSFORM Under the strategy outlined in TRANSFORM 2016, we are specifically focusing on customer needs and social challenges. With the implementation of this plan, we aim to create new value that helps to enrich society by using our technology and know-how to help solve the world s diverse challenges. Contributing to Solutions for Global Challenges and Environmental Problems In recent years, the international community has been facing a variety of challenges, ranging from economic disparity to conflicts, poverty, and hunger. Global environmental problems in particular are a pressing issue. As a corporate executive, I believe that global companies, including Konica Minolta, have a responsibility to contribute to a sustainable society by reducing their environmental impact. Our determination to fulfill this responsibility was made evident with the creation and implementation of Eco Vision As our long-term environmental plan, Eco Vision 2050 consists of long-term environmental goals with three areas of focus, including an 80% reduction in CO2 emissions over the product life cycle compared to fiscal Konica Minolta is committed to reducing environmental impact in all of its business processes, from product development to procurement, production, distribution, sales and service, collection, and recycling. Along the way, we aim to create new value, socially and economically, by pursuing both environmental commitment and corporate growth. This is the foundation of our environmental management. Toward that end, two ongoing endeavors are necessary: technological and business innovation. To illustrate Konica Minolta s technological innovation, I would like to cite the organic light emitting diode (OLED) lighting. In addition to being extremely energy efficient, OLED lighting is thin and flexible, giving a high degree of freedom in applications. I think that it will enable the creation of new, previously unheard-of forms of lighting. What s more, in our core Business Technologies Business, we are working on renovating the business model itself. We re aiming to reduce environmental impact by limiting excess printing and waste through the spread of digital printing systems that print only the amount needed at the time needed. In the textile printing industry, we ve greatly contributed to the reduction of environmental impact by cutting CO2 emissions through conversion to inkjet printing. This is just one example of how we are making contributions to the global environment by leveraging our technical prowess to give shape to the things needed by our customers and society. Becoming a Global Company That is Vital to Society Presently, Konica Minolta operates with over 40,000 employees practicing the Konica Minolta philosophy at sites in 50 countries. Aware of the magnitude of our influence as a global company, we participate in the UN Global Compact and implement initiatives in this regard. Our participation exemplifies to the international community our resolve to fulfill our diverse social responsibilities in the areas of human rights, labor, the environment, and anti-corruption. 3 KONICA MINOLTA CSR REPORT 2015

5 With respect to human rights and other social issues in the supply chain, we work with our suppliers on CSR procurement. Beyond practicing ethical corporate behavior ourselves, we expect our suppliers to cooperate in improving respect for basic human rights and providing a decent working environment. Through this collaboration, we strive to solve social issues together. Additionally, we are strengthening measures to ensure our compliance with conflict minerals regulations in order to prevent human rights infringements stemming from conflict. These commitments and initiatives have led to Konica Minolta s inclusion in global SRI indexes as well as high marks in ratings by CSR research institutions. Contributing to the solutions of social challenges by combining the wisdom and skills of the Group s 40,000 employees and charting a growth strategy to achieve it is my mission as president. It is what a global company must do. As we pursue further growth as a global company that is vital to society, I invite you to look forward to what Konica Minolta will achieve in the future. Shoei Yamana President and CEO Konica Minolta, Inc. KONICA MINOLTA CSR REPORT

6 Overview of the Konica Minolta Group Business Domains Business Segment Applications Principal Products and Services Business Technologies Business Office Services MFPs (Multi-functional peripherals) Laser printers Facsimile machines Software and peripheral devices Cloud services OPS (Optimized Print Services) MCS (Managed Content Services) 80.8% of sales Commercial and Industrial Printing Digital color printing systems Digital monochrome printing systems Digital color-proofing systems Prepress production systems Inkjet printheads Inkjet inks Inkjet textile printers Marketing Print Management (MPM) Marketing Management Service (MMS) Industrial Business 11.1% of sales Performance Materials TAC film for LCD polarizers VA-TAC film for increasing viewing angle High-precision photo plates Barrier film Mirror film Functional film for windows Organic light emitting diode (OLED) lighting Optical Systems for Industrial Use Lens units Pickup lenses for optical disks Spectrophotometers Illuminance meters Spectroradiometers Spectrometers Healthcare Business 7.8% of sales Healthcare Digital X-ray diagnostic imaging systems (CR, DR) Digital mammography Diagnostic ultrasound systems Medical imaging filing systems All-in-one medical imaging information workstations Pulse oximeters Jaundice meters Diagnosis medicine Medical ICT services Corporate Data Company name Konica Minolta, Inc. Head office Marunouchi, Chiyoda-ku, Tokyo, Japan President and CEO Shoei Yamana Established December 22, 1936 Paid-in capital 37,519 million yen (as of March 31, 2015) Fiscal year-end March 31 Number of employees Non-consolidated: 6,348 (as of March 31, 2015) Consolidated: 41,598 (as of March 31, 2015) Consolidated Net Sales (Billion yen) 1, Consolidated Operating Income/ Operating Income Ratio (Billion yen) 75 Operating Income 1,011.7 Operating Income Ratio (FY) (%) (FY) 5 KONICA MINOLTA CSR REPORT 2015

7 Features of the Konica Minolta Group Global Network Covering 150 Countries Konica Minolta has Group sites in 50 countries with a sales and service network covering approximately 150 countries. The Group has more than 40,000 employees, and they support business of customers around the world, from a global and local viewpoint, as One Konica Minolta. Asia (excluding Japan) and other regions % billion yen Europe % billion yen Sales by Region Total 1,011.7 billion yen Japan billion yen 20.1% United States billion yen 23.3% Asia (excluding Japan) and other regions 12,350 30% Europe 9,048 22% Number of Employees by Region Total 41,598 Japan 12,154 29% United States 8,046 19% Genre-top Strategy That is Competitive in Fields with High Added Value Konica Minolta concentrates its efforts and investments in fields with high added value where it can leverage its advantages, such as with A3 color MFPs and digital color printers in the Business Technologies Business, digital radiography (DR) in the Healthcare Business, and TAC film in the Industrial Business. The Group has acquired large shares in each field. A3 color MFPs have a top-class share of the market outside Japan. Digital color printing systems have a top-class share of the market outside Japan. Wireless cassette-type DR system has a top-class share of the market in Japan. VA-TAC film for increasing viewing angle has a top-class share of the global market. Note: Konica Minolta s estimate based on outside data for 2014 Highly Transparent, Sound, and Efficient Corporate Governance System Konica Minolta, Inc. has adopted a company with committees system. It has established three committees nominating, audit, and compensation committees in addition to the Board of Directors, enabling the management supervisory function of the directors to be separated from the business execution function of the executive officers. Furthermore, a director who is not an executive officer serves as chair of the Board of Directors, and the three committees are all chaired by outside directors, thereby enhancing the management supervisory function. Chaired by a director who is not an executive officer Chaired by outside directors Candidate appointment and dismissal Board of Directors Nominating Committee Audit Committee Compensation Committee General Meeting of Shareholders Candidate Reporting appointment and proposals and dismissal Reporting President & CEO Executive Officer Executive Officer Executive Officer KONICA MINOLTA CSR REPORT

8 Konica Minolta s CSR Basic Approach Konica Minolta aims to establish itself as an innovative, constantly evolving company that is vital to society by putting into practice its management philosophy, The Creation of New Value. This is why the Group strives to contribute to the resolution of societal challenges by creating value that improves the quality of our world through its business endeavors. Konica Minolta s CSR activities are guided by this management philosophy and vision, and they are based on its Charter of Corporate Behavior. The Konica Minolta Group Guidance for the Charter of Corporate Behavior is shared globally and illustrates desirable behavior in each of the categories included in the Charter of Corporate Behavior as a basis for understanding and putting the Charter into practice. The Group Guidance articulates Konica Minolta s commitment to acting in compliance with international social norms such as the United Nations Global Compact, in which the company participates, and the Universal Declaration of Human Rights. The Global Compact s Ten Principles Human Rights Labour Environment Anti-Corruption Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses. Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation. Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies. Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. Konica Minolta Group Charter of Corporate Behavior Corporations, in addition to being economic entitles engaged in the pursuit of profit through fair competition, should be beneficial to society at large. For this reason, the Konica Minolta Group shall behave in a socially responsible manner and shall have all of its directors, officers and employees clearly acknowledge the spirit of this Charter of Corporate Behavior. Senior management shall recognize that the fulfillment of the spirit of this Charter is its own role and responsibility and shall take the initiative to ensure that all directors, officers and employees fully understand the Charter. In addition, management shall constantly pay attention to the opinions of internal and external parties and shall promote the implementation of effective systems to secure ethical corporate behavior. 1. Beneficial and safe products 5. Contribution to society We shall strive to earn the confidence of consumers and clients We shall, with a global perspective, affirmatively make contributions to through the development and provision of socially beneficial products society while respecting local customs and cultures. and services with the utmost consideration for safety. 6. Respect for employees 2. Fair and transparent corporate activities We shall, in the pursuit of fair and transparent corporate activities, comply with laws and social regulations and act in accordance with international rules and the articles of incorporation. 3. Communications with society and information disclosure We shall communicate with society at large and disclose corporate information fairly and adequately. 4. Environmental protection We shall acknowledge the seriousness of global environmental issues and shall act voluntarily and affirmatively to protect the environment. Management Philosophy The Creation of New Value We shall endeavor to make the lives of employees comfortable and fulfilling, provide a safe work environment, and respect each employee s personality and individuality. 7. Responsible actions In the event of a violation of the principles of this Charter, in order to solve the problem senior management shall investigate the cause of the violation and develop reforms to prevent its recurrence in accordance with corporate compliance procedures. Prompt public disclosure of precise information and an explanation regarding the violation shall be made and responsibility for the violation shall be clarified. Strict and fair disciplinary action shall be taken including with respect to senior management where necessary. 7 KONICA MINOLTA CSR REPORT 2015

9 CSR Management System At Konica Minolta, the executive officer responsible for CSR, who is appointed by the Board of Directors, carries the duties and authorities concerning the entire Group s CSR. Directly reporting to him or her is the CSR, Corporate Communications and Branding Division, which sees to the implementation of CSR management for the entire Group. The manager of the CSR, Corporate Communication and Branding Division reports the progress of CSR activities to the executive officer responsible for CSR, while also reviewing measures and making proposals. Regarding matters of great importance, the Management Council meets in a timely fashion to deliberate, keeping CSR at the forefront of management decisions. Regarding environmental management, safety and quality control, the Corporate Social Responsibility Division reports to the executive officer responsible for these issues. The division organizes committees and meetings composed of managers responsible for each of these three areas, and drafts policies, constructs systems, and manages progress on a Group-wide basis. Board of Directors Appointment Reporting Executive Officers Decision-making on each division s strategy, commitment to goal achievement Coordination Appointment Reporting Executive Officer in charge of CSR Decision-making on CSR strategy, commitment to goal achievement Communication of policy Reporting Communication of policy Reporting Corporate planning and management divisions Goal setting and progress management Coordination CSR, Corporate Communications and Branding Division Monitors each division s goal setting and progress Daily dialogue Stakeholders Employees Customers Shareholders/investors Business partners Local and global communities Disclosure of CSR information Characteristics of Stakeholders Tools and Opportunities for Communication Customers P31 Business Partners P35 Shareholders and Investors Website Employees P39 Local and Global Communities P43 Global Environment P21 Konica Minolta does business around the world. Major customers of Konica Minolta s main business operations are corporations, government agencies, and hospitals. Konica Minolta procures raw materials, parts and components from different companies depending on the type of business. The majority of these suppliers are located in Japan, China, and elsewhere in Asia. Since Konica Minolta has relatively high ownership by institutional and foreign shareholders, the company is expected to take part in IR initiatives proactively on a worldwide basis. Konica Minolta employs 41,598 people worldwide. Of those, 29% are in Japan, 22% are in Europe, 19% are in North America, and 30% are in China and elsewhere in Asia, and others (Figures are based on total regular employees of consolidated companies, as of March 31, 2015). Konica Minolta operates in countries across the globe, and acts as a responsible member of every community where it operates. As a manufacturer, Konica Minolta engages in various operations that impact the environment. For instance, it generates CO2 emissions, which contribute to climate change because of the use of materials derived from petroleum, which is a dwindling natural resource, and this affects ecosystems in various ways. Providing customer service via websites and call centers Providing product information via websites and newsletters Conducting customer satisfaction surveys Exchanging information via visits to customers Exchanging information at showrooms and trade shows Holding seminars Holding suppliers meetings Procurement Collaboration System Conducting CSR surveys (self-assessment questionnaires) Shareholders meetings Briefings for investors Visits to investors Briefings for business analysts and institutional investors Annual reports IR website Interactive intranet Group journal Employee attitude surveys Dialogue with labor unions Offering internal help line systems Exchanging opinions during inspection tours of production sites by senior staff Holding town meetings attended by senior staff Activities that contribute to local communities Community briefings and invitational events Sending speakers to lectures and places of education Industry group activities Environmental reports and websites Public relations activities through publishing international publications and websites CSR reports, environmental reports, and websites Community briefings and explanatory meetings Collaboration with research institutions KONICA MINOLTA CSR REPORT

10 Konica Minolta s CSR Identify Material CSR Themes and Setting Goals At Konica Minolta, Inc., the CSR, Corporate Communications & Branding Division coordinates with the corporate planning and management divisions within the Group to identify material themes and set goals for CSR activities and monitor their progress and outcomes. By identifying material themes and setting priority goals for CSR activities, Konica Minolta aims to address issues that are most important to stakeholders by analyzing feedback obtained by communicating with them in a variety of ways. In addition, it considers international guidelines related to CSR, including the UN Global Compact and ISO Further, it summarizes and organizes risks and opportunities considered when formulating business plans in each business field. Based on the results, the Group selects the issues that are most material to society and that have a great impact on business and identifies them as material themes and sets priority goals. Flow for Identifying Material CSR Themes and Setting Goals Step 1 Step2 Step 3 Ascertain societal demands Summarize and organize risks and opportunities Identify material themes and set goals Ascertain the issues that are most important to stakeholders Consider international guidelines related to CSR (i.e. Global Compact, ISO 26000) Summarize and organize risks and opportunities considered during the establishment of business plans for each division Identify the issues that are most material to society and have a great impact on the Group s business and establish priority goals Konica Minolta s Inclusion in Socially Responsible Investment Indexes Konica Minolta has been included in several international socially responsible investment (SRI) indexes. The company has been included in the World category (three years straight) and Asia Pacific category (six years straight) of the Dow Jones Sustainability Index (DJSI) issued by U.S.-based Dow Jones and Swiss-based RobecoSAM. The company has also been included in the FTSE4Good Global Index for 12 straight years as well as the Morningstar Socially Responsible Investment Index (MS-SRI). Konica Minolta has received high marks from various other SRI research institutes, such as inclusion in the RobecoSAM Sustainability Yearbook s Gold Class rating (its highest CSR rating), the Prime rating for CSR by oekom research AG, Forum Ethibel s Ethibel Pioneer and Ethibel Excellence investment universes. Additionally, Konica Minolta was included in the Climate Performance Leadership Index (CPLI) 2014 and the Japan 500 Climate Disclosure Leadership Index (CDLI) of CDP, an international NGO attempting to create a sustainable economy. Konica Minolta was the only Japanese company to be included in both the CPLI and CDLI in the information technology sector this year. (As of March 31, 2015). 9 KONICA MINOLTA CSR REPORT 2015

11 Konica Minolta s Material CSR Themes Higher Social Importance Material CSR Themes Boundary GRI G4* Aspects Assuring product safety and preventing quality-related problems Increasing customer satisfaction Promoting CSR throughout the supply chain Group Group Suppliers Customer Health and Safety Supplier Labor Practices / Human Rights / Impact on Society Effect on Business Higher Enhancing communication with shareholders and investors Group Leveraging and developing diverse human resources Group Training and Education Fostering a culture committed to Health-First Group Occupational Health and Safety Promoting occupational health and safety Implementing social contribution activities around the world Green products Green factories Green marketing Group Group Customers Group Suppliers Group Customers Occupational Health and Safety Local Communities Materials Energy Emissions to Air Products and Services Transport * G4: The 4th edition of the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines KONICA MINOLTA CSR REPORT

12 Konica Minolta s CSR Targets and Results Stakeholders Material Theme Fiscal 2014 Targets Customers P31 Business Partners P35 Assuring product safety and preventing quality-related problems Increasing customer satisfaction Promoting CSR throughout the supply chain 1. Number of serious product-related accidents* 1 : 0 2. Improve the quality of products, sales and service throughout the product lifecycle* 2 Audit Konica Minolta group production sites and suppliers Support suppliers in achieving independent initiatives Clarify incentives for suppliers Establish and promote a conflict minerals compliance policy Expand scope of initiatives Shareholders and Investors Web Enhancing communication with shareholders and investors Actively disseminate information and encourage understanding of TRANSFORM 2016, the new medium-term management plan (both institutional and individual investors) Expand effective contents and practice PR to encourage individual investors to purchase Konica Minolta stock Feed individual investors opinions back and disseminate information that helps make Konica Minolta a more attractive investment choice Employees P39 Leveraging and developing diverse human resources Fostering a culture committed to Health-First Promote globally shared HR policies based on a platform for human resources development and deployment Instill the KM philosophy and promote the development of a system for carrying out worldwide human resources development and deployment 1. Establish Health KM2016 medium-term health plan and start rolling it out Establish goals for level of health and work toward them following a three-year plan Minimize the number of employees with health risks Increase health awareness through visualization of employees levels of health Promoting occupational health and safety 1. Number of serious accidents* 4 : 0 2. Frequency rate of accidents causing absence from work: 0.1 or less Enhance cultivation of a culture of safety: involvement of senior management in safety, safety management in the workplace, and raising the safety awareness of individuals Improve global health and safety management Enhance intrinsic safety of equipment (risk reduction) Local and Global Communities P43 Global Environment P21 Implementing social contribution activities around the world Green products Green factories Green marketing P.44 Typical examples of social contribution activities in fiscal 2014 P.23 *1 Serious product-related accidents: Accidents in which products put the lives of product users at risk or cause serious bodily injury and those in which property other than the products is damaged seriously *2 Product lifecycle: All processes from product planning through procurement and production to sales and service 11 KONICA MINOLTA CSR REPORT 2015

13 Fiscal 2014 Results Fiscal 2015 Targets 1. Number of accidents: 0 2. Improve the quality of products, sales and service throughout the product lifecycle* 2 Conducted risk assessment training with the aim of ensuring product safety In the Business Technologies Business, measured the global NPS Score* 3 and implemented measures with development, production, and sales working together based on customer feedback In the Healthcare Business, increased the rate of issues resolved by the Call Center from 60% when it was opened to 80% Conducted EICC audits on Konica Minolta group production sites Considered support programs for suppliers Considered incentive programs for suppliers Established and published a Konica Minolta Conflict Minerals Policy Statement Expanded scope of conflict minerals voluntary survey in the Business Technologies Business and improved the response rate and response accuracy Held a Management Policy Briefing in April and a Medium Term Business Plan Briefing in May for analysts and institutional investors with top management directly explaining basic policies and growth strategies Held company information sessions for individual investors in Tokyo in December and in Osaka in February 2015 with top management directly explaining the Group s business and growth strategies to a total of about 700 individual investors Held two company information sessions for analysts and institutional investors (in September and October) to explain the growth strategy for the Business Technologies Business 1. Number of serious product-related accidents* 1 : 0 2. Improve quality throughout the product lifecycle* 2 Request suppliers to practice CSR Conduct CSR assessments and audits Clarify support programs for suppliers Clarify incentive programs for suppliers Proper information disclosure Further improve the response rate and response accuracy for conflict minerals surveys Continue disseminating information to encourage understanding of the Medium Term Business Plan Updated the IR website Won gold prize for the second year in a row in the Gomez IR website ranking Won highest award (first place overall) for Internet excellence from Daiwa IR Selected as best site for the second year in a row in the Nikko IR Evaluation Participated in an event for individual investors in Osaka in February 2015, directly explaining the Group s business and growth strategies through a company information session and booth presentation Held a company information session at a securities company s branch office in March 2015 Held a small meeting with analysts in December, and held meetings with institutional investors in and outside Japan at opportune times to maintain two-way communication with top management Conducted questionnaires at each information session and shared the results internally, including with top management, as a reference for future IR activities Maintain high external evaluations of the IR website and improve its usability for visitors Continue to hold briefings and events for individual investors Created common evaluation standards for global senior personnel Revised the evaluation system for managers at Konica Minolta, Inc. and adopted our 6 Values as part of the evaluation axis Held town hall-style meetings between employees and the president at different sites 1. Established the Health KM2016 medium-term health plan and started rolling it out Expanded efforts at Group-affiliated companies in Japan to encourage employees with potential health problems to consult a doctor Implemented workplace improvement measures based on results of an organizational analysis of stress checks Started operating KENPOS, a health encouragement website to support better health among employees Held walking events and exercise workshops aimed at establishment of exercise and walking habits among employees 2. Selected as a Health and Productivity Management Brand in March Number of serious accidents* 4 : 0 2. Frequency rate of accidents causing absence from work: In Japan: 0.28, Outside Japan: 0.19 Enhanced cultivation of a culture of safety: Conducted safety training for managers, training to increase sensitivity to dangers, and training to increase the level of personnel with qualifications for dangerous work Global health and safety management: Held meeting of personnel responsible for health and safety in China, and training to experience simulated dangers Intrinsic safety of equipment: Conducted comprehensive risk assessments of new processes Conduct a global employee attitude survey Run programs for systematically developing senior personnel in Asia Continue implementing the town hall-style meetings between employees and the president 1. Continue implementing the Health KM2016 medium-term health plan Enhance and strengthen support for Group-affiliated companies in Japan Reduce the number of high-stress workplaces by strengthening workplace improvement measures Increase the continuous usage rate of KENPOS 1. Number of serious accidents* 4 : 0 2. Frequency rate of accidents causing absence from work: 0.1 or less Enhance cultivation of a culture of safety: involvement of senior management in safety, safety management in the workplace, and raising the safety awareness of individuals Improve global health and safety management Enhance intrinsic safety of equipment and conduct comprehensive risk assessments in different safety fields *3 NPS (Net Promoter Score): An indicator that measures the percentage of customers who recommend the company and its products and services to others *4 Serious accidents: 1. Death, diseases that require or may require long-term care, injuries that cause or may cause disabilities, and specific communicable diseases 2. Accidents that cause three or more employees at one time to suffer on-the-job death, injuries or diseases (including accidents that do not cause absence from work) KONICA MINOLTA CSR REPORT

14 Special Feature1 Sharing Environmental Management Technology and Know-how with Customers, Suppliers, and Society Environmental challenges such as global warming and depleting natural resources can t be resolved by the efforts of one single company. Konica Minolta is working towards a sustainable future by sharing the diverse environmental technology and know-how it has cultivated over many years with customers and suppliers, and working with them to reduce environmental impact. Sharing GreenInnovation 13 KONICA MINOLTA CSR REPORT 2015

15 Key approach Going beyond the bounds of a single company, we will work hand-in-hand with customers and suppliers to solve environmental challenges Takenori Takahashi Senior Manager, Environmental Management Department, Corporate Social Responsibility Division Konica Minolta s management philosophy is The Creation of New Value, and its vision is to establish itself as a global company that is vital to society, innovative, robust and constantly evolving. Based on this approach, we redirected the goals of our Medium-Term Environmental Plan We originally aimed to just reduce environmental impact but we improved upon these goals to create value for both society and the company. In other words, we focused on the question, What kind of environmental activities will make the greatest contribution to society through our growth as a company? We considered in concrete terms what it means to increase business and environmental value and established measurable actions in order to gain the maximum effect for business and society out of our proprietary technology and know-how. Then we formulated the environmental plan in tandem with our business plan so that the provision of products and services that contribute to the resolution of environmental challenges, as well as the processes toward that end, will translate into corporate growth. There is a limit to how much we can do within the company to reduce environmental impact. Sharing value and working together with all stakeholders in the entire supply chain, from parts suppliers to customers to whom we provide products, can achieve a bigger environmental contribution. That is why Konica Minolta has started an initiative to share with its customers and suppliers the environmental technology and know-how it has cultivated and promote suppliers environmental management efforts. This is an initiative that encompasses an even broader scope of CO2 emissions reduction than Scope 3, which looks at CO2 emissions throughout the supply chain. We believe that the contribution to the global environment will increase through activities that go beyond the boundaries of a single company. I believe that one reason Konica Minolta received high evaluations on the Corporate Environmental Management Survey conducted by Nikkei Inc. and the survey of the global not-for-profit organization, CDP, is that Konica Minolta s commitment to spreading the company s environmental technology and know-how throughout society won widespread recognition. From here on, we will continue working with stakeholders to create a sustainable society on a global basis. Initiatives Conducted with Customers and Suppliers to Reduce Environmental Impact Suppliers Konica Minolta Customers Green Products Environmental impact reduction Provision of environmental technology and know-how Environmental impact reduction Provision of environmental technology and know-how Environmental impact reduction Green Factories Green Marketing Three Green Activities KONICA MINOLTA CSR REPORT

16 Special Feature1 Sharing Green Innovation Action 1 Starting the Green Suppliers Initiative to Help Suppliers Reduce Environmental Impact Background and Aim of the Initiative Cooperation with raw materials and parts suppliers, and responsible procurement initiatives within the company, are essential to increase the value of the company s products and services. Based on this philosophy, Konica Minolta has traditionally conducted collaborative procurement activities to share and support the resolution of environmental challenges through dialogue with suppliers and visits to their sites. In fiscal 2014, we started the Green Suppliers Initiative to provide suppliers with the environmental technology and know-how the company has cultivated to help them reduce their environmental impact. Initiatives in Fiscal 2014 In fiscal 2014, the first year of the Green Suppliers Initiative, we started to work with suppliers who agree with the aim of the program. One example involves Toyo Communication Technology (Shenzhen) Co., Ltd. in Shenzhen, China. Experts with a great deal of experience from Konica Minolta s environmental management operations visited the company s production site, performed an energy conservation assessment and held consultations. They conducted a detailed investigation, including the assessment of electricity usage at the site. Based on the results of the analysis, they suggested staged improvements ranging from immediately effective measures such as turning off unnecessary fans to measures requiring investment, such as improving equipment insulation and installing inverters on cooling water pumps for air conditioning. Predicted reduction effects are presented at the same time, making it easy to consider the order of priority for initiatives and helping to increase the supplier s motivation. Furthermore, we work Helping suppliers implement environmental measures in the factory with suppliers to help them develop environmental plans from a medium- to long-term viewpoint. The aim of these activities is not to compel energy saving and resource conservation initiatives on suppliers, but rather to encourage them to voluntarily take such initiatives by visualizing the reduction effects they will bring. Going forward, we will share the significance and principles of engaging in environmental management, in addition to offering technology and know-how, thereby creating environmental value through the collaboration of Konica Minolta and its suppliers. Voice Supplier Feedback It was an opportunity to improve our approach to environmental management, not just technology and know-how. I think the biggest feature of the Green Supplier Initiative is the way in which Konica Minolta is committed to coming into suppliers sites and working with them to make improvements. Indeed, the people who visited our factory did not just bring the methods cultivated in Japan as-is; rather, they thought together with us about what kinds of measures we need. This method improved the motivation of our employees, and an attitude of thinking on one s own and devising improvements started to spread throughout the company. Going forward, we are determined to keep cooperating with Konica Minolta to form and implement environmental plans and measures, and foster a system and culture that values environmental management. Lou Yiliang Chairman and Managing Director Toyo Communication Technology (Shenzhen) Co., Ltd. 15 KONICA MINOLTA CSR REPORT 2015

17 Action 2 Introducing Environmental Management Approaches and Case Studies to Help Customers Solve Their Environmental Challenges Background and Aim of the Initiative Konica Minolta has aimed to share challenges through close communication in order to provide optimal solutions to each customer. By extending this initiative to the environment and introducing Konica Minolta s approach to environmental management and effective case studies, we are supporting customers environmental management efforts. Through this initiative, we deepen our relationships with customers while making the environmental technology and know-how Konica Minolta has cultivated useful for reducing environmental impact throughout society. We provide this service regardless of whether a customer has installed Konica Minolta products or not. Initiatives in Fiscal 2014 In fiscal 2014, the first year of this initiative, we conducted efforts to promote the initiative. For instance, we had an environmental management consultation booth at the Eco-Products Fair, the largest environmental exhibition in Japan, and the bizhub Fair 2014 run by our Business Technologies Business, to explain Konica Minolta s approach to environmental management and specific measures. In addition, we held Executive Seminars in different locations for company managers. At the seminars, we explained Konica Minolta s environmental management and implemented examples. We also distributed questionnaires about customers challenges and needs in an effort to ascertain topics of high concern to them. Through our consultation booth and seminars, we were able to introduce our environmental management program to individuals from nearly 300 companies. This led to individual consultations with many of these companies, aimed at sharing and resolving challenges. In particular, we held discussions that included the introduction of case studies with topics such as the approach to environmental management, the identification of important environmental issues, energy conservation know-how, and the management of chemical substances. In the future, we will continue to enhance our own environmental management while deepening communication with customers. Promoting Konica Minolta s environmental management at an environmental exhibition Giving a lecture at an environmental management seminar organized by Osaka ATC Green EcoPlaza KONICA MINOLTA CSR REPORT

18 Special Feature2 Facing Customer Problems to Create Satisfaction and Happiness Customer-centric is one of the six core values that express Konica Minolta s strengths and heritage. It refers to the customer-oriented attitude that each and every employee aims to practice each day. Committed to this attitude, Konica Minolta is determined to establish honest, long-term relationships and to keep evolving with our customers. Customer-centric Innovation

19 Key approach Establish solid relationships with customers to encourage mutual growth through co-creation Masafumi Uchida General Manager, Environmental Management Division The customer relationship doesn t end after Konica Minolta sells products such as office equipment and medical devices regular after-sales service is essential. Utilizing this business feature and its global direct sales system, Konica Minolta has established solid relationships of trust by seeking ongoing, long-term communication with customers. Today, as customers needs become more diverse and sophisticated, and as competition becomes fiercer on a global scale, it is important to foster strong relationships with customers and become an entity that is indispensable. That is why at Konica Minolta we look not only to our immediate customers, but also to our customers customers, and we work with them to co-create new value in pursuit of business success and the creation of customer satisfaction and happiness. For example, in order to improve customer relationship (CR) management, the Business Technologies Business has set up a Customer Relations Department within the Marketing Headquarters. The department plans measures designed to improve customer relationship management, and it adopted the Net Promoter Score (NPS*) as a metric for that purpose. In fiscal 2013, it started conducting NPS surveys (see page 34) on a global basis. The results and details of NPS surveys, best practices, and other information are discussed at a Global CR Conference (see page 34) attended by customer relationship managers from sales companies in Japan, the U.S., Europe, and the Asia-Pacific region, and then they are shared with executives and the Group at large. The development, production, and marketing departments then work in an integrated manner to resolve the issues identified, translating the results into support for the optimization of customers workflow and continual improvement of customer relationship management. The Union of Japanese Scientists and Engineers recognized these customer-centric initiatives, presenting Konica Minolta with the top position in its fiscal 2014 Quality Management Level Research. Going forward, we will continue pursuing the creation of stronger relationships with customers by carrying out initiatives aimed at improving customer relationship management on a global basis through cooperation among development, production, and marketing. * Net Promoter Score (NPS): An indicator that measures the likelihood of recommending a company, product, or service to others. Concept of Konica Minolta s Solutions Creating New Value with a View to Customers Customers Konica Minolta Provision of solutions that look beyond the immediate customer Customers Customers Customers Production Development of products and services through development-production -marketing cooperation Marketing Co-creation of new value Success of customers businesses Creation of customer satisfaction and happiness Development Feedback KONICA MINOLTA CSR REPORT

20 Special Feature2 Customer-centric Innovation Case 1 Creating a More Open Environment for Community Physicians and Patients Supporting the Coordination of Community Healthcare in Konica Minolta s Healthcare Business As the shortage of community physicians in Japan grows, the establishment of a community-wide system of accessible primary care and general hospitals with specialists and advanced equipment has become an important issue for the community. The Ryoban community of Iwate Prefecture was considering the establishment of a healthcare information network that can share diagnostic data such as clinical records and X-ray images, with the aim of creating a new kind of community healthcare. To aid in achieving this goal, they decided to adopt Konica Minolta s Informity Collaboration Box Service. The deciding factors were this service s ease of use and security, where any kind of terminal device can connect to the service over the Internet and data can be shared securely without fear of information leaks. Users rate the service highly, praising the fact that even small clinics can adopt it, since it is inexpensive compared to a dedicated line. In 2010, a community healthcare network took shape with the participation of approximately 10 medical institutions. The network is contributing to the improvement of community healthcare and is literally saving lives. For example, when the system is used to send patients diagnostic imaging data from clinics to a general hospital, it provides instructions for the transfer to the hospital under the diagnosis of a specialist. Moreover, the system s resilience to disasters was validated when it was quickly restored during the Great East Japan Earthquake in March As positive reviews of the system spread, participation in the network increased to more than 20 institutions as of the end of fiscal Dr. Shin Nakamura, Deputy Director of the Iwate Prefectural Iwai Hospital, who promoted the establishment of the healthcare information network Case 2 Supporting Next-generation Marketing Activities Marketing Print Management Services in the Business Technologies Business In recent years, corporations have been adopting cross-media strategies in their marketing activities, incorporating websites, social networking services, and other new techniques in addition to their printed materials. Against this backdrop, a major European automobile manufacturer expressed a desire to limit expenses associated with printed materials to invest in new media strategies and adopt multiple kinds of media in pursuit of a consistent brand image. In response to these needs for next-generation advertising, Konica Minolta proposed using their Marketing Personnel from Charterhouse PM handle the production of advertising materials at the client s office Print Management (MPM) service. Designed to optimize quality, delivery times, and costs, this service centrally manages design and production of the vast amounts of printed advertising materials produced by corporations. In providing this service, Charterhouse PM Limited, a Konica Minolta subsidiary in the United Kingdom, sent a team of over ten people to the client s office to handle all of the work involved in designing and producing printed materials such as product catalogs in order to promote sales. Before this, the client had designed and produced large volumes of printed promotional materials separately according to the needs of each company division or product. By managing all of these materials together, Charterhouse PM cut costs and improved productivity, allowing it to enhance the quality of printed materials and ensure a consistent brand image. In recognition of its positive contributions to the client s marketing activities, Charterhouse PM has adapted its service offering to provide both online marketing solutions and offline marketing materials, furthering its business partnership with the client. 19 KONICA MINOLTA CSR REPORT 2015

21 External Evaluations of Environmental and Quality Management Konica Minolta Ranked First Place on the Nikkei Environmental Management Survey Konica Minolta was ranked first place in the overall manufacturing sector on the 18th Environmental Management Survey announced in January On this survey, Konica Minolta received high points in all five areas of assessment, especially systems promoting environmental management and product measures. The company believes that its policy and actions regarding environmental management that unify environmental impact reduction and corporate value enhancement, as well as its efforts to contribute to the reduction of environmental impact throughout society by providing its own environmental technology and know-how to customers and suppliers, caught the attention of the judges. Konica Minolta believes that its use of proprietary materials technology to recycle used PET bottles and gallon bottles and its industry-leading technology for adopting the recycled plastic in the outer cases of MFPs led to the high evaluation. Konica Minolta s Score Chart 1. Systems for promoting environmental management 5. Global warming countermeasures 4. Product measures 97pts 98pts 99pts 2. Pollution control measures and biodiversity preservation measures 98pts 3. Resource recycling 97pts What is the Environmental Management Survey? This survey, conducted by Nikkei Inc., analyzes and assesses companies environmental management in five areas: systems for promoting environmental management, pollution control measures and biodiversity preservation measures, resource recycling, environmental measures for products, and global warming countermeasures. This time, the survey questionnaire was sent to 1,729 manufacturers. Konica Minolta was ranked first place overall out of the 419 companies that responded. Konica Minolta Ranked First Place on the JUSE Quality Management Level Research Konica Minolta was ranked first place overall on the 8th Quality Management Level Research announced in October It earned the top position in two out of six assessment areas: customer orientation and system utilization and deployment capability. It also received top-three assessments in the training of human resources who carry out quality management and in the management of reliability, safety, and trust. The company believes that the results reflect recognition of the way Konica Minolta has globally developed a system for quality improvement through development-production-marketing cooperation and pursued customer value with a customer-oriented focus. Award ceremony What is the JUSE Quality Management Level Research? This survey, started jointly by the Union of Japanese Scientists and Engineers (JUSE) and Nikkei Inc. in 2004, assesses the systems and practice of quality management in six areas: top management commitment; training of human resources who carry out quality management; management of reliability, safety, and trust; establishment and adherence to processes; customer orientation; and system utilization and deployment capability. This time, the 8th survey was conducted on 602 prominent manufacturers, construction companies, and software companies in Japan. KONICA MINOLTA CSR REPORT

22 Exercising Responsibility for the Global Environment In order to grow sustainably into the future, a company must not only create economic value it must also address environmental challenges, an important social issue. Under the management philosophy, The Creation of New Value, Konica Minolta aims to reduce environmental impact in all business processes, from product development to procurement, production, distribution, sales and service, collection, and recycling. Environmental management is the foundation of Konica Minolta s growth strategy because through it, the company creates new value from social and economic standpoints, achieving both reduction of environmental impact and growth as a company. Our determination to achieve these goals is expressed in Eco Vision 2050, our set of long-term goals that look forward to the year Eco Vision Reduce CO2 emissions throughout the product lifecycle by 80% by 2050, compared to fiscal 2005 levels 2. Promote recycling and effective use of Earth s limited resources 3. Work to promote restoration and preservation of biodiversity Vision for Reducing CO2 Emissions (%) 100 CO2 emissions Reduction by 40% Reduction by from fiscal 2005 levels by Products Procurement Manufacturing Collection, distribution, sales and services 80% from fiscal 2005 levels by 2050 Concept of the Medium-Term Environmental Plan 2016 Twin Objectives: Resolving Environmental Challenges and Corporate Growth Companies exist because they provide value to society and obtain profit as compensation for that value. Their growth can be sustained by fulfilling social responsibility to the broad range of stakeholders concerned with their business. This is also true regarding environmental sustainability. Konica Minolta coupled its environmental plan with its business plan in order to provide products and services that help solve environmental challenges and achieve corporate growth in the process. Increase environmental value Preventing global warming Supporting a recycling-oriented society Reducing chemical substance risks Restoring and preserving biodiversity Reduction of environmental impact FY2013 Corporate growth Vision A company that creates value for both society and itself by integrating efforts to resolve societal challenges and improve corporate competitiveness and profits Fiscal 2016 Goals set for both reduction of environmental impact and corporate growth Increase corporate value Net sales Risk avoidance Cost reductions Branding About Konica Minolta > Sustainability > Environmental Activities > Environmental Management at Konica Minolta 21 KONICA MINOLTA CSR REPORT 2015

23 Creating Value and Growing Together with Stakeholders There is a limit to how much Konica Minolta can do by itself to solve environmental challenges on a global scale. However, by sharing a commitment to the global environment and collaborating with all stakeholders across the supply chain from the suppliers from whom the Group procures parts to the customers to whom it provides Co-creation of Value with Stakeholders Establishing Material Environmental Issues and Goals Closely Linked with Business The Medium-Term Environmental Plan 2016 addresses both the opportunities and risks related to Konica Minolta s impact on the environment. The Plan identifies material issues by considering both environmental and business priorities. In the process of establishing material issues, Konica Minolta gathers data and conducts an annual review using an objective assessment method. This method ensures the Materiality (Opportunities) Materiality for stakeholders Environment-focused branding Resolution of environmental issues in communities Restoring and preserving biodiversity Providing environmental value through products and services that make use of Konica Minolta s environmental technology and know-how Engaging with the international community to fulfill corporate social responsibility International community Leveraging Konica Minolta s environmental technology and know-how to help solve local challenges Resolution of environmental issues by suppliers Addressing energy/climate change problems Meeting customers environmental requests Resolution of environmental issues by employees Customers Local communities Practicing environmentally friendly business Addressing resource depletion (petroleum resources) Product recycling Konica Minolta products it is possible to make a bigger contribution to environmental sustainability. In line with this idea, Konica Minolta s environmental plan suggests that the Group and stakeholders work side-by-side to create value and grow together. Shareholders and investors Employees validity of material issues and plans as well as the effectiveness of progress monitoring. In this way, the entire organization from executive management down makes a commitment, and highly effective environmental management is achieved by bringing business enhancement goals such as improvement of product appeal, earnings from sales and services, and cost reduction in line with environmental goals. Materiality (Risk) Materiality for stakeholders Depletion of resources (water resources) Ecosystem destruction (forests) Air pollution Water pollution Environment protection around plants Management of waste laws compliance Disclosing non-financial information appropriately and facilitating understanding of the corporate value gained through advanced environmental initiatives Business partners Non-financial information disclosure Leveraging Konica Minolta s environmental technology and know-how in pursuit of the mutual reduction of environmental impact and increased corporate competitiveness through cooperation with suppliers Promoting further implementation and evolution of environmental activities by ensuring employees worldwide feel that they are creating social value in addition to business value through their work and approach their work as worthwhile Energy/climate change problems Product recycling Depletion of resources (rare metals) Tightening of chemical substance regulations (products, production) Depletion of resources (petroleum-based resources) Environmental requests from customers (products) Soil pollution Lagging behind in environmentally friendly business practices Lagging behind in government and other procurement standards For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society Materiality for business Materiality for business KONICA MINOLTA CSR REPORT

24 Exercising Responsibility for the Global Environment Considering the Entire Supply Chain and Product Lifecycle Eco Vision 2050 commits Konica Minolta to reducing its environmental impact in all business processes, from product development to procurement, production, distribution, sales and service, collection, and recycling. To that end, the Medium-Term Environmental Plan 2016 lays out Three Green Activities Green Products (planning and development), Green Factories (procurement and production), and Green Marketing (distribution, sales and service, and collection and recycling) as globally material themes at each stage of business. Therefore, this environmental plan takes the entire supply chain and product lifecycle into account. Lifecycle CO2 Emissions Reduction Goal (thousand tons) Procurement stage 352 Production 387 Distribution 58 Sales and service 93 Product use 1,137 2,027 Actual ,388 Estimated emissions when measures are not implemented % reduction 80% 1,216 Goal 172 thousand tons reduction 405 Vision 2050 reduction Note: Lifecycle CO2 emissions reduction goal covers CO2 emissions from the procurement stage as of fiscal Goals of the Medium-Term Environment Plan 2016 and Fiscal 2014 Targets and Results Goals of the Medium-Term Environment Plan 2016 Material issues Business value Environmental value Material Theme 1 Green Products (planning and development) (1) Creating and providing the green products demanded by customers and society (2) Conforming with government procurement standards and environmental label requirements (3) Dependably complying with product-related laws and regulations Sales Sales of Green Products: 640 billion yen (Share of sales: 58%) Cost reductions Reduce cost of product materials Sales Eliminate lost sales opportunities Risk avoidance Eliminate effect on sales Preventing global warming CO2 reduction during product use: 59 thousand tons CO2 reduction at procurement stage: 105 thousand tons Supporting a recycling-oriented society Resources used effectively: 33 thousand tons Reducing chemical substance risks Control emissions Environment overall Reduce environmental impact by conforming with standards and label requirements Reducing chemical substance risks Reduce hazardous chemical substance risk by conforming to laws and regulations Material Theme 2 (1) Green Factory operations that translate into cost competitiveness (2) Upgraded recycling that resolves community environmental challenges Cost reductions Reduce costs of energy and materials (reduce loss) Cost reductions Reduce cost of materials Preventing global warming CO2 reduction during production: 9.2 thousand tons Supporting a recycling-oriented society Resources used effectively: 4 hundred tons Restoring and preserving biodiversity Sustainable use of water resources Preventing global warming CO2 reduction at procurement stage (target established in 2015 Q1) Supporting a recycling-oriented society Resources used effectively (target established in 2015 Q1) Green Factories (procurement and production) (3) Cooperation with suppliers that translates into cost competitiveness Cost reductions Reduce costs of energy and materials (reduce loss) Preventing global warming CO2 reduction at suppliers (established in agreement with each target supplier) Supporting a recycling-oriented society Effective use of resources (established in agreement with each target supplier) (4) Dependably complying with production-related laws and regulations Risk avoidance Eliminate effect on production Environment overall Reduce environmental impact by conforming with laws and regulations Material Theme 3 Green Marketing (distribution, sales and service, and collection and recycling) (1) Resolving customers environmental challenges (2) Supply chain optimization and linked environmental initiatives Net sales Acquire sales opportunities Cost reductions Reduce cost of distribution and packaging Environment overall Reduce environmental impact on customer side Preventing global warming CO2 reduction during distribution: (target established in 2015 Q2) Supporting a recycling-oriented society Resources used effectively: (target established in 2015 Q2) (3) 3R initiatives for products Risk avoidance Supporting a recycling-oriented society Reinforce 3R initiatives Use resources effectively through product 3R initiatives Note: The targets for fiscal 2016 have been changed partially based on the forecast of a 40% reduction in lifecycle CO2, which is a binding target. 23 KONICA MINOLTA CSR REPORT 2015

25 About Konica Minolta > Sustainability > Environmental Activities > Environmental Management at Konica Minolta Priority Goals for Fiscal 2016 Environmental Value Milestones to achieve Eco Vision 2050 Business Value Business value Sales Sales of Green Products: 540 billion yen (Share of sales: 54%) Cost reductions Reduce cost of product materials Sales Eliminate lost sales opportunities Risk avoidance Eliminate effect on sales Cost reductions Reduce costs of energy and materials (reduce loss) (New material issue from fiscal 2015) Cost reductions Reduce costs of energy and materials (reduce loss) Risk avoidance Eliminate effect on production Net sales Acquire sales opportunities Cost reductions Reduce cost of distribution and packaging 1. Preventing global warming 2. Supporting a recycling-oriented society 3. Reducing chemical substance risks 4. Preserving biodiversity Creating new value both for society and for corporate growth 1. Sales contribution 2. Cost reductions 3. Risk avoidance 4. Branding Fiscal 2014 targets Environmental value Preventing global warming CO2 reduction during product use: 50 thousand tons CO2 reduction at procurement stage: 70 thousand tons Supporting a recycling-oriented society Resources used effectively: 24 thousand tons Reducing chemical substance risks Control emissions Environment overall Reduce environmental impact by conforming with standards and label requirements Reducing chemical substance risks Reduce hazardous chemical substance risk by conforming with laws and regulations Preventing global warming CO2 reduction during production: 1.7 thousand tons Supporting a recycling-oriented society Resources used effectively: 1.8 hundred tons Restoring and preserving biodiversity Sustainable use of water resources Preventing global warming CO2 reductions at suppliers: 1 thousand tons Supporting a recycling-oriented society Resources used effectively: 3 hundred tons Environment overall Reduce environmental impact by conforming with laws and regulations Environment overall Reduce environmental impact at customer side Preventing global warming CO2 reduction during distribution: 4 hundred tons Supporting a recycling-oriented society Resources used effectively: 3 hundred tons Reduce CO2 emissions throughout the product life cycle by 40% compared to fiscal 2005 levels: 2,027 thousand tons (2005) --> 1,216 thousand tons (2016) CO2 reduction: 172 thousand tons Resources used effectively: 33 thousand tons Complying with product-related environmental regulations and controlling emissions Consideration of water resources Sales of Green Products: 640 billion yen (58% of total sales) Eliminating lost sales opportunities in environmental requests from customers Creation of sales opportunities based on environmental approaches Cost reductions from environment-related activities (products, procurement, production, distribution) Eliminating adverse effects on sales and production due to inadequate compliance with product- and production-related environmental regulations Continual inclusion in leading SRI indexes Business value Sales Sales of Green Products: billion yen (Share of sales: 54%) Cost reductions Reduce cost of product materials Sales Eliminate lost sales opportunities Risk avoidance Eliminate effect on sales Cost reductions Reduce costs of energy and materials (reduce loss) Cost reductions Reduce costs of energy and materials (reduce loss) Risk avoidance Eliminate effect on production Net sales Acquire sales opportunities Cost reductions Reduce cost of distribution and packaging Fiscal 2014 results Environmental value Preventing global warming CO2 reduction during product use: 43 thousand tons CO2 reduction at procurement stage: 76 thousand tons Supporting a recycling-oriented society Resources used effectively: 24 thousand tons Reducing chemical substance risks Control emissions Environment overall Reduce environmental impact by conforming with standards and label requirements Reducing chemical substance risks Reduce hazardous chemical substance risk by conforming with laws and regulations Preventing global warming CO2 reduction during production: 1.9 thousand tons Supporting a recycling-oriented society Resources used effectively: 2.3 hundred tons Restoring and preserving biodiversity Sustainable use of water resources Preventing global warming CO2 reductions at suppliers: 1 thousand tons Supporting a recycling-oriented society Resources used effectively: 3 hundred tons Environment overall Reduce environmental impact by conforming with laws and regulations Environment overall Reduce environmental impact at customer side Preventing global warming CO2 reduction during distribution: 7 hundred tons Supporting a recycling-oriented society Resources used effectively: 2.5 hundred tons For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society Risk avoidance Reinforce 3R initiatives Supporting a recycling-oriented society Use resources effectively through product 3R initiatives Risk avoidance Reinforce 3R initiatives Supporting a recycling-oriented society Use resources effectively through product 3R initiatives Note: The expressions have been changed for some material issues and issues added, based on the results of a materiality analysis. KONICA MINOLTA CSR REPORT

26 Exercising Responsibility for the Global Environment Material Theme 1 Green Products Background and Issues As environmental and social issues like climate change intensify, our society is changing. The world is moving from an age when the primary demand was for material affluence to an age that finds value in products and services that help to improve the quality of society. Konica Minolta is seizing the opportunity provided by this change in social values. We fully recognize the importance of innovative, competitive products and services that benefit customers and society. We are working to develop solutions to social issues while reducing environmental impact and contributing to the Group s earnings. Key Measures Operate a Green Products Certification System for evaluating and certifying products with superior environmental performance Set numerical targets for increasing the share of total sales accounted for by Green Products Promote the systematic creation of Green Products Create environmental value suited to different businesses and product characteristics, thus fulfilling the aim of helping customers and broader society reduce environmental impact Product Initiatives Green Products Certification System In operation since fiscal 2011, Konica Minolta s Green Products Certification System is an original process for evaluating and certifying products with superior environmental performance. The system aims to create environmental value suited to different businesses and product characteristics in order to help customers and society at large reduce environmental impact. While conforming to the standards of environmental labels used in different countries, Konica Minolta introduced its own system, in order to provide products that reduce environmental impact even further. To be certified as a Konica Minolta Green Product, a product must meet criteria established for different businesses and product characteristics with respect to certification standards tailored to environmental issues. The goals that must be met are set at the product planning stage, and the product is certified at one of three levels based on its degree of achievement. The Medium-Term Environmental Plan 2016 sets specific targets for increasing certified Green Products share of total sales. Working to achieve these targets, Konica Minolta is developing highly competitive products that help customers and society reduce environmental impact while also improving earnings. Simultaneously, the Group is disclosing the environmental performance of certified products in various media, including product catalogues and websites, to educate the public about these efforts. Green Products Certification System Products that contribute to realizing a sustainable society Products that achieve the industry s top environmental performance Products that achieve top-level environmental performance in the industry Compliance with environment-related regulations Sustainable Products (SP)* Green Products Plus (GPplus) Green Products (GP) Environmentally responsible products based on product assessment Certification requirements Acquisition of global environmental labels Accordance with Konica Minolta s CSR procurement guidelines Certification criteria (excerpts) Preventing global warming Reduce CO2 emissions from product usage Reduce CO2 emissions throughout product life cycle Supporting a recycling-oriented society Reduce petroleum-based resource usage Make products smaller and lighter Increase the operating life of products Promote the use of re-used and recycled materials Promote the use of plant-based materials Reduce rare metals usage Production at a certified Green Factory Reducing the risks from chemical substances Restrict the use of hazardous chemical substances Restoring and preserving biodiversity Use biological resources in a sustainable manner Manufacturing process innovation * Sustainable Products (SP) certification standards require that the product not only embody superior environmental performance not typically achieved by earlier products, but also incorporate original technology. While seeking to reduce the environmental impact of all of its products, by setting a very challenging certification level, Konica Minolta aims to promote innovation and contribute more proactively to sustainability. 25 KONICA MINOLTA CSR REPORT 2015

27 About Konica Minolta > Sustainability > Environmental Activities > Environmental Initiatives > Green Products (product initiatives) Expansion of Certified Green Products In fiscal 2014, Konica Minolta placed 33 new models of certified Green Products on the market, bringing the total to 147. Sales of Green Products in fiscal 2014 came to billion yen, or 54% of the Group s total sales. This large increase over the 41% (389.6 billion yen) figure in fiscal 2013 helped customers and society to reduce environmental impact and contributed to earnings growth for Konica Minolta. Also, in fiscal 2014, Green Products had a CO2 reduction effect during product use of 43 thousand tons and represented 24 thousand tons in effectively used resources. Recyclable PC/PET Konica Minolta has been striving to develop innovative technology to recycle PET plastic beverage bottles into plastic material with sufficient strength, flame resistance and usability for the outer casing of MFPs. Making use of polymer alloy technology to obtain better performance by blending different resins, the company developed recycled PC/PET plastic, which is a composite material made with recycled polycarbonate (PC). This material was the first in the industry to be used in the outer casing of color MFPs, in Konica Minolta s bizhub series. Milk Bottle Recycling Konica Minolta recycles milk bottles made out of polyethylene, which are widely distributed in Europe and the U.S., and turns them into toner bottles for MFPs. It developed washing technology that removes the smell of milk and minute cells that would lead to quality degradation and established a mass production system in Mexico and Malaysia. The company intends to increase the proportion of recycled material in the raw material used for toner containers from the current 25% to 100% Toner bottles made from recycled material in the future. Sales of Green Products Sales Share of total sales Examples of Environmental Technologies That Enable Green Products Upgraded Recycling bizhub PRESS 2250P made with recycled PC/PET Fiscal 2014 Target billion yen 54% Fiscal 2014 Results billion yen 54% Organic Light Emitting Diode (OLED) Lighting Fiscal 2016 Target billion yen 58% OLEDs, which use an organic material that emits light when stimulated by an electric current, have great promise as a next-generation lighting source with low environmental impact. Leveraging its proprietary technology, Konica Minolta has been an early pursuer of R&D into the practical applications of OLEDs. In June 2014, it achieved the world s highest luminous efficiency* for an OLED of 139 lm/w, which exceeds that of general LED lighting. * As of June Textile Printer Shining OLED tulips, the world s first OLED flower illumination The inkjet textile printer does not require the plate making and colored size mixing that is needed with conventional screen-printing. It also contributes to the reduction of energy usage, resources usage, and waste, since it enables on-demand production that uses only the amount of ink and material needed. Compared to conventional screen-printing, it reduces environmental impact significantly, with a 97% reduction in sizing usage, a 62% reduction in water resources usage, and a 57% reduction in electricity usage. Nassenger PRO1000 inkjet textile printer For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society KONICA MINOLTA CSR REPORT

28 Exercising Responsibility for the Global Environment Material Theme 2 Green Factories Background and Issues Environmental issues are becoming ever more serious, and soaring energy prices are having an increasing impact on corporate management. Konica Minolta recognizes the importance of pursuing greater efficiency in production processes. We are working hard to minimize the use of energy and resources by reducing waste in manufacturing processes, and focusing on developing production technologies that curb emissions of CO2, waste, and chemical substances. We also see the need to increase contributions to the global environment by helping our suppliers reduce their environmental impact. Key Measures Operate a Green Factory Certification System that facilitates comprehensive evaluation of environmental activities at production sites Foster activities in line with the production strategy of each business and manufacturing site Create value for both society and the company by simultaneously reducing environmental impact and bringing costs down Promote Green Supplier Activities that facilitate environmental impact reduction together with suppliers Reduce environmental impact by providing Konica Minolta s environmental technology and know-how to suppliers Production Initiatives Green Factory Certification System Konica Minolta has operated its original Green Factory Certification System for comprehensive evaluation of the environmental activities at its production sites since The system aims to reduce both costs and environmental impact by providing a framework for activities that make the most of the production strategy of each business. The system s certification requirements include not only the attainment of targets related to preventing global warming, supporting a recycling-oriented society, reducing the risk of chemical substances, and restoring and preserving biodiversity, but also the degree of attainment for some 250 specifications related to the implementation process. The system crystallizes Konica Minolta s know-how and helps improve the quality of environmental activities. As of fiscal 2015, all business units around the world are making efforts toward achieving Level 2. Note: A single business unit is an organization engaged in the same production activities even across different locations. A single location may include several business units. Green Factory Certification Standards Objectives Management Indicators Level 1 Level 2 Preventing global warming CO2 emissions (per unit of production *1 ) 12% reduction *2 20% reduction *2 Supporting a recycling-oriented society Reducing the risks of chemical substances Zero waste Waste discharged externally (per unit of sales) 30% reduction *2 50% reduction *2 activities Final disposal rate of total waste 0.5% or less 0.5% or less Petroleum-based resource waste (per unit of sales) 30% reduction *2 50% reduction *2 Atmospheric emissions of volatile organic compounds (VOCs) Achievement of fiscal 2011 targets for each site in accordance with Medium- Term Environmental Plan 2015 Achievement of fiscal 2015 targets for each site in accordance with Medium- Term Environmental Plan 2015 Guidelines for managing soil contamination risk - Consistent with guidelines Restoring and preserving Guidelines for biodiversity preservation (consideration of water biodiversity resources and wastewater, and proper management of greenery at factories) - Consistent with guidelines Guideline-based activities Achievement rate of implemented items 70% or more 90% or more *1 Per unit of production: Environmental impact in terms of production output or production volume. *2 The base year is fiscal Based on this (base year) figure, standards tailored to factory characteristics are established. 27 KONICA MINOLTA CSR REPORT 2015

29 About Konica Minolta > Sustainability > Environmental Activities > Environmental Initiatives > Green Factories (procurement and production initiatives) Expansion of Sites with Level 2 Green Factory Certification In fiscal 2014, six more units (five in Japan and one in China) achieved Level 2, bringing the total up to 14 units (10 in Japan and four in China). The remaining four units are making efforts toward achievement within fiscal Main Energy-saving Measures Improve productivity Optimize equipment operation time Reconsider air conditioning operation Save energy in lighting Save energy in molding machines Save energy in compressed air Reconsider refrigerator operation Use waste heat Reduce heat radiation loss Main Resource Conservation and Recycling Measures Reduce material loss Reduce packaging materials Reuse packaging materials Reduce mold scrap Reduce press scrap Reduce support materials Reuse pallets Procurement Initiatives Green Supplier Activities Industrial engineering (IE) work analysis, yield rate improvement, installation of automatic machines, takt time reduction, production space optimization Shutdown during downtime, reduction of standby power consumption Temperature setting optimization, operating time optimization Thinning out lighting, conversion to high-efficiency lighting Infrared heating, installation of servo motors, cylinder insulation Installation of inverters, air pressure optimization Refrigerator integration, reconsideration of exit temperature setting Reduction of steam production by using waste heat from dehumidifiers Steam piping insulation, piping integration, reduction of valve leaks Improvement in materials, parts, and product yield rates Switching to simple packaging, increasing package quantities Switching to reusable shipping containers within the company, between production sites, and with parts suppliers Adoption of dies with no molding scrap, minimization and internal recycling of molding scrap Minimization of feed pitch Reuse of cleaning solvents, reuse of molding machine oil Switching to reusable pallets with parts suppliers, changing the size of pallets for parts and using them to ship products Konica Minolta conducts Green Supplier Activities aiming to reduce environmental impact together with suppliers. In fiscal 2014, the company initiated these activities in collaboration with two suppliers. Experts in energy and waste Units that Achieved Level 2 in Fiscal 2014 Unit Konica Minolta Business Technologies (Dongguan) Co., Ltd. Konica Minolta Electronics Co., Ltd. Konica Minolta Supplies Manufacturing Kansai Co., Ltd. Toyohashi Precision Products Co., Ltd. Konica Minolta Chemical Co., Ltd. Konica Minolta, Inc., Inkjet Business Unit Country/region China Japan Japan Japan Japan Japan Examples of Efforts Made by a Unit that Achieved Level 2 Pursuing Energy Savings on the Production Floor, Including with Molding Machines and Refrigerators (Konica Minolta Business Technologies (Dongguan) Co., Ltd.) Konica Minolta Business Technologies (Dongguan) produces MFPs in the city of Dongguan, Guangdong Province, China. It achieved significant energy savings by improving the heating method for molding Konica Minolta Business machines and changing the Technologies (Dongguan) temperature settings for refrigerators. The conversion from electrical heating to infrared heating for molding machines increased heating efficiency, enabling heating in a shorter time than before. Also, the addition of insulation to the surface of the heaters reduced heat radiation loss and helped reduce air conditioning burden by preventing the indoor temperature from rising. The temperature settings for refrigerators were changed according to application in light of the results of an energy-saving assessment conducted by a Konica Minolta expert. Raising the temperature setting of refrigerators for general air conditioning led to energy savings by increasing efficiency. management from Konica Minolta visited the suppliers factories and proposed reduction measures based on current conditions. They worked with the suppliers staff to formulate and implement improvement plans. For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society KONICA MINOLTA CSR REPORT

30 Exercising Responsibility for the Global Environment Material Theme 3 Green Marketing Background and Issues The environmental concerns of customers around the world are growing as the global community continues to witness the negative effects of climate change. Given this situation, Konica Minolta regards the provision of value that helps customers to reduce environmental impact as a vital part of its social responsibility and a driver of its own growth. This is why Konica Minolta actively proposes and strives to popularize products and services that help reduce environmental impact. Moreover, the Group also recognizes that it is imperative to pursue greater efficiency in the transport, sales and service activities that deliver those products to customers, as that translates into lower costs and less environmental impact. Key Measures Carry out Green Marketing activities as a way of practicing environmentally friendly sales and services: Help society at large to reduce environmental impact by providing products and services that meet customers environmental needs Leverage Konica Minolta s environmental technology and know-how to help customers solve environmental challenges Work on challenges set for each region, such as efficiency improvement measures in distribution, packaging, sales, and service and the establishment of a system to recover and recycle used products Sales and Service Initiatives Helping Reduce Environmental Impact through Optimized Print Services for Customers The Optimized Print Services (OPS) offered by Konica Minolta are a solution that delivers optimized equipment arrangement and improved capacity utilization through an all-in-one contract for the operation of printing devices such as printers and MFPs. Konica Minolta is making its OPS available globally. The companies that have entered into global contracts are located around the world and cover a broad range of industries, including insurance and financial services, international transportation services, and industrial machinery and home appliance manufacturers. Optimization of the printing infrastructure through OPS not only improves work efficiency and cuts costs in customers offices; it also helps them reduce environmental impact. For example, consolidating several printing devices into an MFP and updating to the latest models provide energy-saving effects that can reduce power consumption significantly. Continuous monitoring of device usage leads to a reduction of wasteful printouts while digitalization of documents translates into reduced storage space and less consumption of paper resources. Creating Shared Value with Customers Environmental challenges such as global warming and resource depletion are not problems that can be solved by the initiatives of a single company. In addition to efforts to reduce environmental impact associated with its own business operations, Konica Minolta is promoting an initiative that supports the environmental management of its customers in order to make a bigger contribution to protection of the global environment. The aim of this initiative is to work together with customers as a partner to resolve their environmental challenges while making use of the technology and know-how cultivated over many years conducting environmental activities. Konica Minolta and customers focus on the Three Green Activities of Green Products, Green Factories, and Green Marketing. Through this initiative, Konica Minolta will deepen cooperation with its customers and expects to accumulate more environmental technology and know-how by responding to the wide-ranging environmental needs of customers in diverse fields. In this way, Konica Minolta aims to create shared value with customers and to pursue sustainable growth together with them. 29 KONICA MINOLTA CSR REPORT 2015

31 About Konica Minolta > Sustainability > Environmental Activities > Environmental Initiatives > Green Marketing (distribution, sales, service, recovery, and recycling initiatives) Distribution Initiatives Reducing CO2 Associated with Distribution In order to reduce CO2 emissions associated with distribution, it is essential to increase transportation efficiency and to utilize methods that have the smallest environmental impact. Konica Minolta is reducing CO2 emissions from distribution operations by shortening transportation distances. Through the optimization of distribution sites and routes worldwide, the company is reducing the number of containers with improved loading efficiency, and reducing the frequency of air transport. In fiscal 2014, Konica Minolta improved the loading efficiency of containers delivering business technology products to European countries from the German distribution center by adopting a loading simulation program in Europe. It also opened a distribution center in Eastern Europe, thereby improving the efficiency of transporting business technology products. Whereas it used to transport products from a manufacturing site in China to Eastern Europe through a distribution center in Germany, shipping directly to the Eastern European distribution center has shortened the transportation distance. In Japan, Konica Minolta has also achieved higher transporting efficiency by integrating storage sites for healthcare products previously dispersed around the country into the Kanto region. In addition, Konica Minolta is working at decreasing CO2 Product Recycling Initiatives Recycling Information Technology Products Konica Minolta is developing systems for recycling used information technology products in different locations worldwide and striving to increase the recycling rate. In Japan, the company collects used MFPs through sales companies nationwide, dismantling and separating the components at seven sites of associated companies around the country. The components are separated into metals, emissions by reducing the frequency of air transportation through improved demand forecast accuracy as well as the adoption of milk-run deliveries that collect cargo from several manufacturers at a time. Reducing Packaging Materials In fiscal 2014, Konica Minolta worked at reducing packaging materials for replacement parts that have a high distribution volume. It surveyed the transportation situation in each country and reduced the size of packages by optimizing impact resistance during transportation. Reducing the size and weight of products has minimized the use of packaging materials and contributed to reduction of CO2 emissions during distribution by increasing transportation efficiency. Small packages for replacement parts (previous version on the right, smaller version on the left) plastics, and other categories and sent to different processing companies for recycling as reusable materials or fuel. Konica Minolta has also established its Clean Planet Program, a system for free-of-charge recovery and recycling of used toner cartridges for laser printers in Japan, 18 European countries and the United States. In the U.S., the program has been expanded to include used toner bottles for MFPs. Machines Collected in Japan in Fiscal 2014 Estimated collection rate Recycling rate (by weight) 70% 98% For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society KONICA MINOLTA CSR REPORT

32 Earning the Confidence of Customers Konica Minolta works to maximize customer satisfaction and trust by providing products and services of superior value. The Group has articulated its basic approach to accomplishing this in the Konica Minolta Quality Policy, which governs Group companies worldwide. An issue of particular importance is ensuring safe, reliable products and services. Accordingly, Konica Minolta has established a unified quality assurance system across the Group and addresses quality assurance in terms of the entire product lifecycle. Konica Minolta is determined to help create a better world by solving customer and societal challenges, and with this aim it seeks to build deeper relationships with customers so that it can identify and satisfy both latent needs and specific requests. FY2010 FY2011 FY2012 FY2013 FY2014 Material Theme 1 Assuring Product Safety and Preventing Quality-related Problems FY2010: Started full-fledged product safety education for the Group s engineers FY2010: Expanded operation of a Risk Map for safety assessment and increased the assessment levels FY2011: Organized a Double Quality Assurance System FY2014: Developed safety training focused on risk assessment FY : Used Quality Management Self-Assessments to review quality issues FY2011: Started efforts to improve customer relationship management Material Theme 2 Increasing Customer Satisfaction FY2012: Established indicators for customer relationship management FY : Cross-deployed good practices through global CR conferences FY2014: Undertook initiatives to improve customer relationship management through development-productionmarketing cooperation About Konica Minolta > Sustainability > CSR Activities > Together with Customers 31 KONICA MINOLTA CSR REPORT 2015

33 Material Theme 1 Background and Issues Assuring Product Safety and Preventing Quality-related Problems In recent years, customers and society at large have been demanding higher quality products and services. Konica Minolta practices risk management throughout the Group, with an emphasis on preventing quality problems caused by performance defects and accidents due to product safety problems. Product safety training based on practice is implemented throughout the Group in order to raise the safety awareness of every employee. Furthermore, Konica Minolta has established even more rigorous product safety standards in an effort to prevent accidents. When quality problems occur, the company shares information and strives to respond in an accurate and timely manner. Main Initiatives in Fiscal 2014 The Addition of a Risk Assessment Improvement Program Since fiscal 2010, Konica Minolta has conducted Group-wide product safety education for engineers involved in design and development, manufacturing technology, procurement, and quality assurance. The courses are designed to increase engineers knowledge of product safety issues and raise their awareness of potential problems. In fiscal 2014, the Group launched a Risk Assessment Improvement Program based primarily on identifying risks and assessment practice using actual machinery so that knowledge and skills cultivated in previous training could be deployed in practical work. Questionnaires were completed by participants after the program and their feedback was used to evaluate effectiveness and improve training content. Going forward, Konica Minolta will continue to educate employees about product safety and awareness through ongoing training programs. Key Measures Prevent serious product accidents Conduct risk assessment practice during product safety education Prevent quality problems Facilitate visualization of quality risks throughout the product lifecycle Share information on quality problems and cross-deploy countermeasures Sharing Information about Quality Problems and Cross-deploying Countermeasures within the Group Konica Minolta is accelerating its Group-wide effort to disclose information regarding quality problems and cross-deploy countermeasures as One Konica Minolta, a policy launched in fiscal The goal is to increase sensitivity to quality issues, thereby resolving problems early on and ensuring better response. In fiscal 2014, the Group conducted Production Capability Assessments at 19 production sites, including sites outside Japan. Members of each site serve as assessors in this effort to perform mutual cross-assessments of businesses. Assessments are designed to visualize issues at each site by quantifying different aspects, such as the 5S s (Sort, Straighten, Shine, Standardize, and Sustain), visualization, elimination of inefficiencies, and factory management. The 5S s and visualization are intended to encourage proactive improvements on the production floor by presenting ideals as guidelines. Additionally, good practices are cross-deployed by sharing assessment results and examples of initiatives from each site on the company intranet. For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society Risk Assessment Improvement Program using actual machinery Production Capability Assessment KONICA MINOLTA CSR REPORT

34 Earning the Confidence of Customers Material Theme 2 Increasing Customer Satisfaction Background and Issues In its office equipment, medical devices and measuring instruments businesses, Konica Minolta is determined to increase the confidence and trust of its customers by developing and maintaining long-term relationships. It hopes to establish a reputation that will lead to customers recommending Konica Minolta to other potential customers. That is why the company actively gathers feedback from its customers, has established a system for using the feedback to improve products and services, and is attempting to enhance relationships with customers to help them realize their goals. Key Measures Improve customer relationship management Formulate measures for developmentproduction-marketing cooperation in each business based on customer feedback Establish measurement indicators for customer relationship management in each business, and implement measures globally Main Initiatives in Fiscal 2014 Promoting the Adoption of Remote Maintenance in the Healthcare Business Products provided by the Healthcare Business are used in life-threatening medical settings, so there is a need for especially rapid responses to product failures and problems. That is why Konica Minolta is focusing on improving response time by its call center in order to minimize diagnostic downtime. The company established key performance indicators (KPI) on the themes of reducing customer waiting time on the phone, improving the call center s ability to resolve problems on its own, and improving customer satisfaction, and it worked to make improvements in all of these areas. As part of that effort, the call center in Japan is promoting the adoption of remote maintenance for the quick resolution of problems by remotely operating products at customers locations through the Internet. Since this system enables problems to be solved without sending out engineers, it reduces product downtime, thereby shortening diagnostic interruption in healthcare settings. In fiscal 2014, around 50% of the calls received by the call center were from customers using remote maintenance. As a result, downtime has been shortened by about 45,000 hours per year,* a 65% improvement over the past five years. Thanks to the adoption of remote maintenance, the decrease in the number of times technicians were dispatched resulted in a cost reduction of approximately 70 million yen. Additionally, the KPI of improving the call center s ability to resolve problems on its own has been improved from approximately 60% at the time the call center was opened to approximately 80% today. * Calculated based on Konica Minolta s indicators Remote Maintenance System Customers (hospitals, clinics) Telephone support Konica Minolta Call Center Reduction in Downtime (Hours) 50,000 40,000 30,000 Secure network 20,000 10,000 Konica Minolta products Remote support Remote servers (FY) 33 KONICA MINOLTA CSR REPORT 2015

35 Global Deployment of NPS Surveys to Measure Customer Relationship Management in the Business Technologies Business In April 2012, the Business Technologies Business created a Customer Relations (CR) Division and adopted NPS* as a target indicator. It developed a scientific approach, adding NPS to the conventional customer satisfaction survey and deployed it globally. With the aim of improving customer satisfaction, measures were implemented to analyze Konica Minolta customer feedback. The survey helped the company gauge customer views and see if the company would provide excitement that exceeds the expectations of customers and if customers would thus recommend the company to other potential customers. The survey also evaluated how the company's products would contribute to customers businesses. As of fiscal 2013, the CR Division has conducted a global NPS survey with the same standards in Japanese, U.S. and German markets. The results of the analysis identified common worldwide issues that could not be recognized simply from a product s specifications. In response to these issues, the development, production, and marketing departments worked together to discuss crosscutting countermeasures, created a response team comprised of members from the R&D headquarters and quality assurance, and made progress through improvements to existing products and to the design and assessment of new products. Then, by incorporating these improvement results in the Highlight Since fiscal 2013, Konica Minolta has held an annual Global Customer Relations Conference in collaboration with sales companies in and outside Japan in order to deploy initiatives to improve customer relationship management on a worldwide basis. The sharing of various issues and initiatives in the improvement of customer relationships around the world and the knowledge gained from those efforts lead to the pursuit of best practices Group-wide. In fiscal 2014, the second conference was held in January Customer relationship managers from sales companies in Japan, the U.S., Europe, and the Asia Pacific region as well as members of the development, production, and marketing departments attended the conference and engaged in two days of valuable discussion. The first day saw the sharing of knowledge on the establishment and utilization of global KPI, the adoption of a transaction survey to measure customer satisfaction in response to each company s actions, the introduction of the Customer Journey Map* method being used by a sales company in the U.S., PDCA cycle to verify the next global NPS survey, the Group will achieve continuous improvement. In the fiscal 2014 survey, the CR Division continually monitored how improvements to existing products and the development of new products changed customer satisfaction regarding issues identified in the previous fiscal year. By feeding the analysis results back to the R&D headquarters and steadily making efforts to improve issues, a culture of innovative product development that creates a deep impression on customers has been created. * NPS (Net Promoter Score): an indicator that measures the percentage of customers who recommend the company and its products and services to others. System of Issue Resolution Beginning with an NPS Survey Management layer NPS survey Products Sales Installation Contact center Maintenance /Support Corporate image Global Customer Relations Conference Held to Share Global Issues and Initiatives and the adoption of a program for training customer relationship managers and leaders. This was followed by decisions on future actions. On the second day, all participants experienced a Customer Value Creation Workshop, which was implemented in Japan ahead of other countries, and participants learned methods of thinking about value from the customer point of view. Global Customer Relations Conference R&D Headquarters Quality Assurance Operations Manufacturing Headquarters Marketing Headquarters Sales companies in respective countries * Customer Journey Map: An analysis method for visualizing a variety of contact points between a company/product/service and users Shared at the Quality Council and implemented in working group activities For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society KONICA MINOLTA CSR REPORT

36 Cooperating with Business Partners Konica Minolta regards the suppliers from which it procures raw materials and parts and contractors that conduct production as indispensable partners in its business operations. Konica Minolta also recognizes that it is essential to promote CSR not just within its own operations but also across its entire supply chain. This is why Konica Minolta promotes CSR procurement on a Group-wide basis and requires its business partners to consider matters related to human rights, ethics, health, and safety in their business operations. Additionally, the Group is taking steps to comply with conflict minerals* 1 regulations that seek to prevent violations of human rights in conflict areas* 2 from which mineral resources used in products are sourced. *1 Conflict minerals: Columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives *2 Conflict areas: Democratic Republic of the Congo or adjoining countries FY2008 FY FY2015 FY2009: Request for suppliers to practice CSR using Supplier Code of Conduct FY2009: CSR assessment using self-assessment questionnaires Implementing CSR Procurement Preparatory work for establishing a procurement policy and taking initiatives FY2009: Visit and check suppliers sites FY2014: Audit of group production sites and suppliers FY2015: Provision of assistance to suppliers in achieving independent initiatives FY2015: Clarification of incentives for suppliers Addressing the Issue of Conflict Minerals FY2011: Establishment of basic approach to issue of conflict minerals FY2012: Start with the Business Technologies Business for implementation of measures FY2014: Establishment and promotion of Conflict Minerals Policy Statement FY2014: Expansion of the scope of initiatives About Konica Minolta > Sustainability > CSR Activities > Together with Business Partners 35 KONICA MINOLTA CSR REPORT 2015

37 Material Theme Background and Issues In line with the belief that it is essential to work towards a sustainable society in which human rights are respected, Konica Minolta works with its suppliers on CSR procurement and compliance with conflict minerals regulations. CSR procurement aims to make improvements in the supply chain related to human rights, ethics, health and safety while improving product quality and cutting costs. Konica Minolta strives to make improvements to their supply chain through assessments and audits based on the Supplier Code of Conduct. In terms of compliance with conflict minerals regulations, which attempt to prevent infringements of human rights associated with conflicts at the most upstream part of the supply chain, the Group is conducting surveys of suppliers with the aim of procuring conflict-free minerals based on a Conflict Minerals Policy Statement. Konica Minolta s vision for CSR activities in the supply chain is to establish a sustainable society in which human rights are respected. It believes that it is important to increase the corporate value of not only the Group but also its suppliers by working together to address respect for human rights and resolving this social issue within the procurement and production operations, enabling customers to purchase Konica Minolta s CSR Activities in the Supply Chain Promoting CSR Throughout the Supply Chain Approach to CSR Activities in the Supply Chain Konica Minolta Improvement of corporate value Expansion of sales opportunities Enhancement of brand power Improvement of employee satisfaction Customers Improvement of customer satisfaction Purchasing of products made with a commitment to CSR Creation of shared value Sustainable society Key Measures Implement CSR procurement Request that suppliers practice CSR using Supplier Code of Conduct CSR assessments and audits Support suppliers in achieving independent initiatives Clarify suppliers incentives Address the issue of conflict minerals Establish Conflict Minerals Policy Statement and implement measures Ensure proper disclosure of information on initiatives Implement conflict minerals survey products with peace of mind. With respect to CSR procurement, Konica Minolta plans to support suppliers, including the training of internal assessors, in conjunction with the identification and improvement of issues through CSR assessments and audits using a self-assessment questionnaire to help suppliers achieve their independent initiatives. Suppliers Improvement of corporate value Expansion of sales opportunities Improvement of employee satisfaction Securing of top talent For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society KONICA MINOLTA CSR REPORT

38 Cooperating with Business Partners Important Theme Main Initiatives in Fiscal 2014 (1): Implementing CSR Procurement Implementing CSR Procurement Using the EICC Framework In October 2013, Konica Minolta joined the EICC,* in order to strengthen its CSR activities in the supply chain. The EICC, which is made up of more than 100 companies, including the world s leading electronics manufacturers and their major suppliers, works to improve human rights, ethics, health, and safety in the supply chain. In fiscal 2014, with its new EICC membership, Konica Minolta restructured the CSR assessment method it uses to conduct procurement, and it also started CSR audits by EICC-certified organizations. * Electronic Industry Citizenship Coalition: An organization promoting CSR in the electronic industry s supply chain CSR Audits by EICC-certified Organizations In fiscal 2014, Konica Minolta began conducting CSR audits, in addition to CSR assessments, to verify the status of initiatives on human rights, ethics, health, safety, and other matters via visits to Group production sites and suppliers. In fiscal 2014, an audit was conducted on Konica Minolta Business Technologies (WUXI) Co., Ltd., a Group production site in China, through the EICC VAP (Validated Audit Program) in an effort to improve issues and enhance efforts even further. The Group also verified the audit results for suppliers that had already undergone an EICC VAP audit. EICC VAP Audits are performed by third-party organizations certified by the EICC. They are conducted based on the EICC protocol to audit conformity to the five elements of the EICC Code of Conduct: labor, ethics, environment, health & safety, and management system. EICC VAP Audits are one of the most trusted CSR audits in the world. Restructuring CSR Assessments From fiscal 2009 to fiscal 2013, Konica Minolta conducted CSR assessments using a self-assessment questionnaire based on the EICC tools and systems. Assessments of suppliers covered a total of 658 companies as of the end of fiscal The assessments confirmed that along with the Group s production sites, its suppliers have met the targets set by Konica Minolta. As Konica Minolta joined the EICC, in fiscal 2014 it restructured its CSR assessment system using the EICC framework, in keeping with the basic approach to CSR assessment using a traditional self-assessment questionnaire. This has made it possible to share assessment results among EICC member companies. EICC VAP Audit 37 KONICA MINOLTA CSR REPORT 2015

39 Main Initiatives in Fiscal 2014 (2): Addressing the issue of Conflict Minerals Establishment of a Policy for Compliance with Conflict Minerals Regulations It has been pointed out that the mining of the mineral resources for columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives in the Democratic Republic of the Congo or adjoining countries can end up fueling conflict. In order to prevent human rights infringements such as child and forced labor associated with conflict, the Organization for Economic Co-operation and Development (OECD) established the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, and requests that companies take responsible actions within their supply chains. Additionally, Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed in 2010 in the United States, requires companies listed on the U.S. stock exchanges to disclose information about the conflict minerals extracted in the conflict areas. Konica Minolta understands that it must fulfill its social responsibility as a global company with regard to this problem. In June 2014, the company established and published the Konica Minolta Conflict Minerals Policy Statement, in order to strengthen its initiatives regarding conflict minerals regulations. It has renewed its request to suppliers to cooperate with the surveys it has been conducting since fiscal 2013, based on this policy. It established a conflict minerals survey system in each business division and carried out assessments. Conducting Conflict Minerals Surveys in All Business Divisions In fiscal 2014, all business divisions at Konica Minolta received more inquiries from customers about conflict minerals than in the previous fiscal year. Replies were given to these inquiries based on surveys of suppliers. The Business Technologies Business, which is Konica Minolta s core business and receives inquiries frequently, conducts a voluntary conflict minerals survey. In fiscal 2014, it conducted the survey with the aim of increasing the response rate and accuracy of replies in light of the survey results from the previous fiscal year. As a result, the company received responses from more than 90% of its suppliers, a substantial improvement in the response rate of around 80% in the previous fiscal year. Additionally, the accuracy of replies increased, with the number of responses indicating unknown country of origin decreasing from the previous year. The number of reports of certified conflict-free smelters, which is a basis for determining that parts and materials are conflict-free, increased significantly from 61 companies in the previous fiscal year to 199 companies, allowing verification that some parts and materials are conflict-free. No evidence pointing to conflict involvement was confirmed regarding other parts and materials. Strengthening Cooperation with Relevant External Organizations Konica Minolta participates in CFSI,* 1 which carries out international initiatives such as the creation of questionnaires pertaining to conflict minerals regulations and a program that audits and certifies conflict-free smelters. It also participates in the Responsible Minerals Trade Working Group hosted by JEITA,* 2 an organization that collaborates with CFSI on conflict minerals issues, and contributes to its activities. In fiscal 2014, the Working Group continued to encourage understanding of conflict minerals regulations by ascertaining and responding to trends in conflict minerals regulations and by holding briefings on the conflict minerals survey. In addition, Konica Minolta is participating in the Conflict-Free Sourcing Working Group established by JEITA together with companies in the automotive industry, in an effort to address conflict minerals regulations through cross-industry cooperation. *1 CFSI (Conflict-Free Sourcing Initiative): An international organization through which companies cooperate to encourage responsible procurement, including that of conflict-free minerals, established by EICC and GeSI (Global e-sustainability Initiative, an organization that promotes CSR in the telecommunications industry) *2 JEITA: Japan Electronics and Information Technology Industries Association For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society KONICA MINOLTA CSR REPORT

40 Growing Together with Our Employees Konica Minolta is comprised of people of many different nationalities, languages, and backgrounds. The source of the Group s competitiveness lies in how this diverse team shares values and cooperates closely. This is why Konica Minolta respects each individual and forbids any kind of discrimination related to race, religion, national origin, or gender. It seeks to train personnel to make the most of their skills from a global perspective, always aiming to create new value for society. Konica Minolta also focuses on fostering a culture committed to Health-First and improving workplace health and safety Group-wide. The company seeks to create a working environment in which each and every employee can succeed while enjoying physical and mental wellbeing. FY2010 FY2011 FY2012 FY2013 FY2014 Material Theme 1 Leveraging and Developing Diverse Human Resources FY2008: Implementation of employee exchange program between Group companies in and outside Japan FY2009: Establishment of a global HR Web system FY2010: Establishment of Global Executive Program for management executives FY2010: Provision of career development programs for female employees (e.g. leadership training, mentor system) Material Theme 2 Fostering a Culture Committed to Health-First FY2010: Implementation of Medium Term Health Management Plan FY2014: Implementation of medium-term health plan Health KM2016 FY2011: Establishment of a system based on the Konica Minolta Statement on Health Material Theme 3 Promoting Occupational Health and Safety FY2009: Implementation of measures focused on important sites FY2010: Initiative on fundamental facility improvements for safety FY2013: Implementation of measures to foster a culture of safety About Konica Minolta > Sustainability > CSR Activities > Together with Employees 39 KONICA MINOLTA CSR REPORT 2015

41 Material Theme 1 Background and Issues Main Initiatives in Fiscal 2014 Leveraging and Developing Diverse Human Resources In order to grow sustainably, a company must respond to the intensification of global competition as well as market changes such as the increasing sophistication and diversification of customer needs. Talented employees who go above and beyond from a global standpoint and from the customer s perspective are the key to success in this endeavor. To develop this kind of talent, it is important to attract and continue to foster personnel with diverse values. It is also vital to build an environment in which their respective talents can be exerted and used to the fullest. This is why Konica Minolta puts so much energy into human resources management for its global workforce of over 40,000 employees. Making Use of a Global Platform for Human Resources Development and Deployment Konica Minolta has created a platform (system, tools, and philosophy) for training personnel and making the most of their skills in an effort to boost the collective strength of its employees. While further defining roles at the global, regional, and individual company levels, the Group is pursuing global personnel training and deployment as One Konica Minolta. In fiscal 2014, the Group established an HR management system in each region, namely North America, Europe, China, and Asia. It conducts evaluations of the Group s senior personnel under uniform global evaluation standards to identify strengths and challenges. Based on these results, the company then chooses the right people for the right posts while also fostering successors. Expansion of a Strategy Council Consisting of Members of Top Management Konica Minolta established the Global Strategy Council in fiscal 2013 to make use of the knowledge and viewpoints of executives from sites outside Japan to facilitate its Group management. In the first year, two top managers from Konica Minolta Inc. and two top managers from sales bases in Europe and the United States met as members of the council for four sessions. The results were reflected in the ensuing medium-term business plan. Since fiscal 2014, sessions continue to be held with an executive from a base in Asia to consider management planning from a global perspective. Key Measures Enhance human resources development and utilization on a global scale Develop business leaders, choose the right people for the right posts, and visualize the workforce Reform corporate culture Instill the management philosophy system, promote diversity, improve productivity, and create an environment with high employee satisfaction Regional Implementation of Business Leader Development Program Since fiscal 2010, the Group has run a Global Executive Program (GEP) for executives at affiliated companies around the world, with the aim of developing business leaders. As of the end of fiscal 2014, the program had been held nine times with 148 people from 60 companies participating. The goals of the GEP are to raise participants awareness as business leaders within the Konica Minolta Group and to enable participants to forge a global network of personal contacts among themselves. During the program, which lasts about one week, participants embrace a global mindset and develop their leadership skills via face-to-face discussions with top managers and through debates on key issues among themselves. Since fiscal 2013, the Group has held a Regional GEP, bringing together manager-level personnel with the aim of developing potential future executives in each region. The first Regional GEP was held in China and the second was held in Singapore in May For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society Global Executive Program session KONICA MINOLTA CSR REPORT

42 Growing Together with Our Employees Material Theme 2 Fostering a Culture Committed to Health-First Background and Issues In recent years, the risk of lifestyle-related disease among employees has been mounting in the business world with an aging population and the entrenchment of irregular living habits. In addition, with an increase in the number of workers taking time off due to mental health problems, declining labor productivity is attracting attention as an issue that has to be addressed. Recognizing that the health of its employees is the foundation of successful business operations, Konica Minolta is enthusiastically implementing measures for improving employee health in collaboration with its health insurance association. These actions are based on the Konica Minolta Statement on Health, which advocates for promoting health management by fostering a culture committed to putting health first. Key Measures Minimize the number of people with health risks Enhance individual guidance for physical and mental health Increase awareness through visualization of employees level of health Establish indicators that show employees level of health Clarify and share Konica Minolta s status on each indicator Main Initiatives in Fiscal 2014 Establishing Medium-term Health Plan Health KM2016 In fiscal 2014, Konica Minolta established a three-year medium-term health plan, Health KM2016. The plan aims to realize the ideas advocated in the Konica Minolta Statement on Health announced in May The Group is working with the priority policies of minimizing the number of people with health risks and increasing health awareness through the visualization of employees level of health. Minimizing the Number of People with Health Risks Konica Minolta has implemented a range of measures aimed at decreasing the number of employees eligible for restrictions on work, taking time off due to mental health problems, or experiencing high levels of stress. In fiscal 2014, Konica Minolta expanded to affiliated companies in Japan its efforts to reduce potential health risks among employees, an activity which had previously been made only at Konica Minolta, Inc. Industrial health staff were deployed to assist with individual consultation for this initiative. With these expanded efforts, the company aims to reduce the number of people with health risks throughout the Group. In an effort to maintain and improve mental health among employees, stress tests were provided to all the employees in Japan. Employees were able to see their results and use them to make adjustments for a healthier lifestyle. Test results for each workplace were given to managers and improvements were made in high-stress workplaces. Promoting Health Initiatives Konica Minolta has established eight indicators (smoking, exercise, walking, diet, alcohol, dental care, sleep, and workplace communication) that show the level of employees health. The company has broadly implemented a range of health improvement measures with the aim of ranking in the top 10% of leading Japanese companies for each indicator. Highlight Konica Minolta Becomes 2014 Health and Productivity Stock Selection In March 2015, Japan s Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange selected Konica Minolta as a company that represents enhanced corporate value through health and productivity management. Due to the company s ideas, system, and efforts aimed at health management, Konica Minolta was chosen as a 2014 Health and Productivity Stock Selection. As part of an effort by the government to extend the nation s lifespan through healthy lifestyles, this selection encourages health management initiatives by recognizing listed companies that value and implement employee health programs from a business perspective and by introducing them to investors as attractive investment destinations. The first selection was announced in fiscal 2014, and 22 companies were recognized, with one chosen from each industry. Konica Minolta was selected in the electrical equipment industry. 41 KONICA MINOLTA CSR REPORT 2015

43 Konica Minolta has implemented various measures globally to prevent accidents during working hours with the goals of attaining zero serious accidents and a frequency rate of 0.1 for accidents causing absence from work.* 1 In fiscal 2014, the Group provided education on safety management in the workplace to all managers. It also produced an educational DVD to raise sensitivity to danger using examples of past accidents caused by human error. Accidents Causing Absence from Work at Sites in Japan (Cases) Accidents causing absence from work Accident frequency rate (Frequency rate) (Cases) Accidents causing absence from work Material Theme Background and Issues 7 Promoting Occupational Health and Safety Konica Minolta has maintained a low level of occupational accidents at its production sites both in and outside Japan through many years of occupational health and safety initiatives. Based on a commitment to safety first for employees, the Group has focused on fostering a culture of safety by involving senior management, reinforcing safety management in the workplace, taking steps to enhance the safety awareness of every individual, and implementing fundamental facility improvements for safety. Main Initiatives in Fiscal 2014 Strengthening Risk Reduction Efforts to Prevent Occupational Accidents Note: Boundary: Regular and temporary employees of Konica Minolta, Inc. and Group companies in Japan Accidents Causing Absence from Work at Overseas Production Sites (FY) Accident frequency rate (Frequency rate) (FY) Note: Boundary: Regular and temporary employees at major production companies in China and Malaysia Key Measures Prevent occupational accidents Prevent accidents that could become more severe Prevent similar accidents Promote health and safety management by senior management Increase safety awareness of every employee Implement fundamental facility improvements for safety These DVDs were distributed to all Konica Minolta sites in Japan and China in an effort to increase the safety awareness of every employee. Additionally, the company provided continued education about safe work practices to employees with specialist qualifications who perform tasks that could lead to serious accidents. It also implemented fundamental facility improvement initiatives to reduce risk through risk assessments with the aim of making facilities safe and preventing serious accidents and the repetitive occurrence of minor accidents. As a result of these efforts, the company reported zero serious accidents in fiscal The frequency rate of accidents causing absence from work was 0.28 in Japan and 0.19 outside Japan. The severity rate of accidents causing absence from work* 2 was 0.01 in and outside Japan. *1 Accident frequency rate: The number of persons absent from work per one million total actual working hours for current employees *2 Accident severity rate: The total number of days absent from work per 1,000 total actual working hours for current employees Strengthening Health and Safety Initiatives at Sites Outside Japan In fiscal 2014, the Group implemented measures to strengthen safety management at sites outside Japan, which account for the majority of production operations. In China, for instance, in addition to each site s usual health and safety initiatives, the Group launched the China Health and Safety Managers Committee for all sites, including production and sales sites. The Committee promotes the strengthening of health and safety, including employee health management. Additionally, Konica Minolta established a Safety Dojo, a dedicated facility where employees can experience mock dangers first hand, with an aim of preventing accidents that involve being pinched by or dragged into machinery, missing one s footing on stairs, and falls. The Safety Dojo was established at two production sites and training was implemented. In Malaysia, a plant established in May 2014 acquired OHSAS certification, quickly beginning operation of a health and safety system. For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society KONICA MINOLTA CSR REPORT

44 Hand-in-Hand with Society As a global company, Konica Minolta aims to earn the confidence and trust of society and to be a good corporate citizen in the local communities where it operates across the world. Konica Minolta strives to cooperate with diverse stakeholders to contribute to the development of local communities while respecting each region s culture, history, and customs based on the company s Basic Policy on Social Contribution Activities. Focusing on issues faced by local communities, the Group actively helps resolve issues where it can make a unique and highly effective contribution through its business and technologies. To give these initiatives momentum, the Group is committed to developing human resources who can work harmoniously in diverse cultures while maintaining a global outlook. The company also supports and encourages employees self-motivated social participation. Konica Minolta Basic Policy on Social Contribution Activities As a responsible, global corporate citizen, Konica Minolta makes Group-wide efforts to address social issues that it can contribute to through its businesses in order to be an entity that is essential to society. It is also committed to contributing to the creation of a sustainable society by continually engaging in activities that meet local challenges in the various countries where it operates. Main Social Contribution Activities Operated La Fondation d entreprise Konica Minolta, a foundation that supports people with disabilities (France) Provided ongoing support to the Green Marathon, which contributes to reforestation in Ethiopia (France) P44 Supported the activities of The Prince s Trust, which provides education, training, and employment support to disadvantaged young people (UK) Collected recycled paper and donated 10,000 euros worth of food for each ton of paper to a food bank (Portugal) Held learning events about the starry sky through planetariums and tours of the Yaeyama Islands (Japan) Contributed to the community through the Spring of Relief disaster preparedness water resource (Japan) P44 Supported the transfer of information for people with visual impairments through Braille reproduced by a 3D copying system (Japan) Participated in the Wish Project, a campaign supporting the education of children (China) Held a painting contest to support children with disabilities (China) P44 Supported local NPOs (Australia) P44 Supported disadvantaged children (USA) P44 Supported the efforts of a breast cancer foundation through employee donations (USA) About Konica Minolta > Sustainability > Contributing to Society 43 KONICA MINOLTA CSR REPORT 2015

45 Material Theme Main Initiatives in Fiscal 2014 Green Marathon to Protect Green Landscapes in Ethiopia (France) Konica Minolta Business Solutions France has supported the Green Marathon. Established in 2011, this initiative helps reforestation efforts in Ethiopia. In fiscal 2014, around 200 employees participated in the marathon and also called on sales agents and customers to join in. Their efforts enabled the planting of over 85,000 trees in Ethiopia in Green Marathon Supporting Disadvantaged Children (USA) Implementing Social Contribution Activities around the World Konica Minolta Business Solutions U.S.A. engages in a wide range of social contributions in fields such as education, healthcare, the environment, and disaster relief. In fiscal 2014, the company continued to participate in activities such as the Back to School program that provides school supplies to disadvantaged children, the Food for Thought program that supplies groceries to families in need, and the Books2BETTER program that provides books to young children from low-income families. Broad Support for NPO Activities (Australia) Willy Berré Photographe Konica Minolta Business Solutions Australia supports the activities of a variety of local NPOs such as The Smith Family, which supports education, training, and lifelong learning for disadvantaged young people, the Breast Cancer Network of Australia, which supports breast cancer patients, Project Futures, which works against global human trafficking, and Landcare Australia, a natural environment conservation organization. The company provides support in various ways, including donations, event sponsorship, the provision of workspace and printers, and the volunteerism of its Participating in a Landcare Australia event employees. Provision of Spring of Relief Water Resources as Disaster Preparedness In fiscal 2014, Konica Minolta, Inc. signed a Disaster Cooperation Agreement with the city of Hino in Tokyo and the Hino Municipal Hospital. Under the agreement, the company installed a private electric generator at the well it owns at Tokyo Site Hino so that the well can be operated even during a power outage. The well can supply the large amounts of water needed during a disaster for dialysis and treatment at medical facilities as well as drinking and everyday water for community residents. Thus, the well was improved as the Spring of Relief disaster preparedness water resource. Going forward, the company will continue contributing to the safety and security of the community through cooperation with medical institutions, waterworks departments, and fire departments. Ceremony marking the Disaster Cooperation Agreement Supporting Children with Disabilities (China) Konica Minolta Business Solutions (China) has been supporting six schools in Shanghai and Beijing for children with special needs since fiscal The company has presented the schools with color textbooks printed on Konica Minolta high-speed MFPs and stationery, and employees volunteer at the schools. In fiscal 2014, the company supported a total of eight schools in Shanghai, Beijing, Guangzhou, and Wuxi. Konica Minolta has also conducted a painting contest at the schools with the theme of Dream in Green and Draw the Future in Color since fiscal In fiscal 2014, the fourth year of the contest, there were 63 submissions, and the 20 award-winning children were given scholarships. For the Global Environment Earning the Confidence of Customers Cooperating with Business Partners Growing Together with Our Employees Contributing to Society KONICA MINOLTA CSR REPORT

46 Management System Konica Minolta views strengthening corporate governance as an important management issue. Accordingly, it has adopted a company with committees system consisting of the Nominating, Audit and Compensation Committees. The company has established a governance system that eliminated dependency on personal characteristics with the aim of enhancing corporate value. Corporate Governance Konica Minolta believes that improving corporate governance is a vital part of fulfilling its responsibilities to stakeholders. The company is continuing to reform its management and governance structure to ensure more timely and appropriate decision-making on matters such as restructuring. Company with Committees Konica Minolta has adopted a company with committees system, enabling the management supervisory function of the directors to be separated from the business execution function of the executive officers. The executive officers perform decision-making and business execution, as entrusted by the Board of Directors. The content of this business execution is subject to the oversight of the Board of Directors and to audits by the Audit Committee, which enhances the effectiveness, validity, legality Corporate Governance Structure Board of Directors (management supervisory function) General Meeting of Shareholders Reporting & proposals Candidate appointment & dismissal Candidate appointment & dismissal Board of Directors Reporting Nominating Committee Compensation Committee Empowerment Supervise Reporting & proposals Candidate appointment & dismissal Audit Audit Committee Audit Committee Office Audit mechanism Executive Officers (business execution function) Construct and execute internal control systems (reporting/directives mechanism) Directives President & CEO (Management Council Meetings) Coordination Management Executive Meeting Various Committees* Regulations and Provisions Audit Corporate Audit Division Reporting Executive Officers Note: Committees related to internal controls Risk Management Committee, Compliance Committee, Corporate Information Disclosure Committee, Investment Assessment Committee, Business Assessment Committee. Board of Directors and Three Committees (as of June 19, 2015) Board of Directors (11 people) Directors (Chairman of the Board) Outside Director Outside Director Non-Executive Officers Outside Director (7 people) Outside Director Director Director Directors and Executive Officers (4 people) Director, President and CEO Representative Executive Officer Director, Senior Executive Officer Director, Senior Executive Officer Director, Senior Executive Officer Nominating Committee Audit Committee Compensation Committee Directors who are also executive officers do not serve as members of the three committees. Chairman 45 KONICA MINOLTA CSR REPORT 2015

47 About Konica Minolta > Sustainability > CSR Activities > Compliance About Konica Minolta > Sustainability > CSR Activities > Corporate Governance About Konica Minolta > Sustainability > CSR Activities > Risk Management and soundness of the management. The Board of Directors includes four outside directors, who are highly independent and have no significant business relations with the company. A majority of directors do not serve as executive officers. There are three committees within the Board of Directors: the Nominating, the Audit, and the Compensation committees all of which are chaired by outside directors. Although the law in Japan only requires that no executive officers serve on the Audit Committee, Konica Minolta has implemented a system in which its executive officers do not serve on any of these committees, in order to ensure better transparency. Compliance At Konica Minolta, the Chief Compliance Officer appointed by the Board of Directors determines matters important for promoting Group compliance and is responsible for promoting and overseeing compliance under the President and CEO of Konica Minolta, Inc., who has ultimate responsibility for Group compliance. To fulfill that responsibility, the Group Compliance Committee, which is composed of officers responsible for various corporate functions, serves as an advisory body for the Chief Compliance Officer. To promote compliance in each department at Konica Minolta, Inc., the General Manager of each department serves as the official responsible for compliance. At subsidiaries inside and outside Japan, the president of each subsidiary serves as the official responsible for promoting compliance at each company. The Chief Compliance Officer also reports to the Audit Committee periodically on the Group-wide compliance situation. Global Group Support System The Legal Division at Konica Minolta, Inc. drafts important matters and measures for promoting Group compliance to assist the Chief Compliance Officer. The Legal Division also assists with the compliance activities of each department and subsidiary directly and indirectly. The Chief Compliance Officer also appoints Regional Compliance Coordinators in Europe, North America, and China to implement activities to promote compliance in accordance with the circumstances of each region overseas. Group Compliance Promotion System Konica Minolta Group Konica Minolta, Inc. Board of Directors Nominating Committee Audit Committee Compensation Committee Appointment President & CEO Ultimate responsibility on Group compliance Opinions and reports Chief Compliance Officer Overall management of Group compliance Appointment Council Group Compliance Committee Officers Appointment Report Report Assistant Department supporting compliance promotion (Legal Division) Official responsible for departmental compliance = General Manager of each department Compliance promotion of each department and compliance management of subsidiaries under its control Support Report Official responsible for compliance at subsidiaries (President of each company) Compliance promotion of each company and compliance management of subsidiaries under its control Report Report Support Regional Compliance Coordinator KONICA MINOLTA CSR REPORT

48 Management System Anti-corruption Initiatives The basic policy on preventing corruption is set forth in the Konica Minolta Group Guidance for the Charter of Corporate Behavior, which provides common compliance guidance for the Konica Minolta Group. It includes a prohibition on extorting gifts and entertainment, on accepting bribes, and a ban on any contact with organized criminal elements. Konica Minolta ascertains and responds to country risk related to corruption with reference to sources such as Transparency International s* 1 Corruption Perception Index.* 2 Preventing corruption is designated as a common, worldwide priority in the Group s annual compliance policy. The Group s compliance promotion support departments take the lead in formulating measures aligned with the laws and practices in each country and provide ongoing education in cooperation with Regional Compliance Coordinators. The principal initiatives in fiscal 2014 included the creation of an Anti-Corruption, Anti-Bribery policy document at the North American office equipment and business solutions sales company, education on commercial bribery in China at 13 Chinese subsidiaries, seminars in Japan on responding to transparency guidelines in the healthcare industry, and anti-corruption legal training in Japan for staff responsible for transactions in China and the U.S. In China, specific guidelines regarding gift giving and entertainment were created as a guide for anti-corruption measures in the Compliance Manual for China. Additionally, Konica Minolta shared best practices from initiatives at each company and promoted practical anti-corruption measures in line with the relevant laws in each country, exemplified by America s Foreign Corrupt Practices Act, the United Kingdom s Bribery Act, and China s Law Against Unfair Competition. There were no incidents regarding bribery or corruption in fiscal *1 Transparency International: an international NPO that acts to prevent corruption, especially bribery. *2 Corruption Perception Index: an index produced by Transparency International (TI) which surveys and numerically ranks the level of corruption in relations between the public and private sectors by country. Compliance with Antitrust Laws Konica Minolta works at establishing policies and providing education related to antitrust laws according to the laws and business environment of each region. Accordingly, antitrust law measures have been positioned as a common, worldwide theme in the Group s annual compliance policy. Compliance promotion support departments and Regional Compliance Coordinators in Europe, North America, and China have taken the lead in formulating policies aligned with the laws and business environments in each region and providing ongoing education. The principal initiatives in fiscal 2014 included raising awareness about antitrust laws through educational programs about compliance for employees at each level, education for company presidents and sales department general managers in Europe, and education about the Subcontract Act, a complementary law of the Antimonopoly Act, for production departments in Japan. In fiscal 2014, there were no problems related to antitrust laws. Risk Management Executive officers are responsible for various risks including managing strategic risks, financial risks, risks pertinent to environmental regulations and hazard risks. They identify and evaluate these risks and develop and monitor countermeasures in their respective spheres of management. Additionally, the Risk Management Committee, chaired by an executive officer appointed by the Board of Directors, is convened periodically and as necessary. The Committee examines the risks identified by each executive officer, as well as the countermeasures in place. The Committee then checks to ensure that the risk management system is functioning effectively, making revisions where necessary. The Group responds as a whole to risks judged as particularly important, led by an executive officer appointed by the chairperson. The activities of the Risk Management Committee are periodically reported to the Audit Committee. 47 KONICA MINOLTA CSR REPORT 2015

49 Data Human Resources Data Summary Employee Composition by Employment Status Regular employees Konica Minolta, Inc. 6,348 Non-regular employees* 2,039 (As of March 31, 2015) Total 8,387 Group companies in Japan 12,154 3,726 15,880 Group companies outside Japan 29,444 3,248 32,692 Konica Minolta Group (worldwide) 41,598 6,974 48,572 Note: Non-regular employees: Contract or temporary employees Employee Gender Ratio (As of May 2015) (Women:Men) Fiscal 2012 Fiscal 2013 Fiscal 2014 Konica Minolta, Inc.* 1 16:84 16:84 16:84 Konica Minolta Group (worldwide)* 2 31:69 *1 Includes employees seconded to Group companies but not employees seconded from Group companies *2 Covers over 85% of the consolidated Group on a number of personnel basis Percentage of Women in Management Positions (As of May 2015) Fiscal 2012 Fiscal 2013 Fiscal 2014 Konica Minolta, Inc.* 1 1.8% 2.1% 2.7% Konica Minolta Group (worldwide)* % *1 Includes employees seconded to Group companies but not employees seconded from Group companies *2 Covers over 85% of the consolidated Group on a number of personnel basis Percentage of Employees with Disabilities Fiscal 2012 Employment rate 1.93% Fiscal % (As of June of each fiscal year) Fiscal % Note: For Konica Minolta, Inc., up through fiscal From fiscal 2014, total for Konica Minolta, Inc., Konica Minolta With You, Inc., and Konica Minolta Electronics Co., Ltd. because of the establishment of the special subsidiary Konica Minolta With You. The period for ascertaining the figures was changed to June of each fiscal year. Work-life Balance Support Program Use Fiscal 2012 Fiscal 2013 Fiscal 2014 Women Men Women Men Women Men Maternal health management leave Maternity leave Spousal maternity leave Parental leave Shorter working hours for childcare Work-at-home during child-rearing Nursing care leave Shorter working hours for nursing care Note: Boundary: Regular employees of Konica Minolta, Inc. KONICA MINOLTA CSR REPORT

50 Data Environmental Data Summary Overall View of Environmental Impacts Resulting from Business Activities INPUT Konica Minolta OUTPUT Resources (Usage in products) Petroleum-based resources (47.8 kt) Non-petroleum-based resources (64.3 kt) Procurement Atmosphere CO2 emissions (375.6 kt-co2) Energy Electricity (383 million kwh) Fossil fuels (2,480 TJ) Water Water consumption (3,569 thousand m 3 ) Water recycled/reused (32.8 thousand m 3 ) Resources Amount recycled internally (6.0 kt) Production/ Research and development Atmosphere CO2 emissions (312.4 kt-co2) SOx (0 t), NOx (56.4 t), Soot and dust (0.6 t) Wastewater Wastewater (3,138 thousand m 3 ) COD (0.1 t), Phosphorous (0.03 t), Nitrogen (1.0 t) Waste Total waste (20.8 kt), Waste discharged externally (14.7 kt), Amount recycled (14.3 kt), Final disposal (21.0 t) Chemical Substances Atmospheric emissions of VOCs (252 t) Energy Fossil fuels (467.2 TJ) Resources Packaging materials usage (29.6 kt) Distribution Atmosphere CO2 emissions (33.6 kt-co2) Energy Electricity (76.8 million kwh) Fossil fuels (offices) (68.0 TJ) Fossil fuels (vehicles) (670.9 TJ) Sales and service* Atmosphere Waste CO2 emissions (offices) (41.2 kt-co2) CO2 emissions (vehicles) (45.4 kt-co2) Waste discharged externally (3.0 kt) Energy Electricity (589.5 million kwh) Usage Atmosphere CO2 emissions (295.9 kt-co2) Resources Product recovery (16.8 kt) Recovery * Boundary: All consolidated sales companies worldwide Resources (product recovery) Product recovered and recycled (16.6 kt) Main Environmental Performance Data Product Lifecycle CO2 Emissions Product use Sales and service Distribution Production Procurement stage (kt-co2) 1,600 1,200 1,331 1,295 1,226 1,108 1,063 Energy Input (Production / R&D) (TJ) 8,000 7,194 7,371 7,375 6,000 6,493 6, , , (FY) (FY) Total Waste (Production / R&D) (Tons) 36,000 31,626 32,315 30,679 27,000 Water Usage (Thousand m 3 ) 6,000 5,823 5,962 5,839 4,500 4,383 18,000 21,527 20,763 3,000 3,569 9,000 1, (FY) (FY) 49 KONICA MINOLTA CSR REPORT 2015

51 About Konica Minolta > Sustainability > Environmental Activities > Environmental Management at Konica Minolta > Environmental Data Calculating CO2 Emissions Across the Entire Supply Chain Konica Minolta has calculated the CO2 emissions associated with the Group s activities across its entire supply chain, from the upstream to the downstream aspects of its operations, based generally on the standards of the GHG Protocol,* the international standard. The calculation showed that CO2 emissions throughout the supply chain were approximately 1.37 million tons, which represents a decrease of about 2.7% from fiscal Emissions from the Group s activities including direct emissions from fuel use (Scope 1) plus indirect emissions from the consumption of purchased electricity, heat or steam (Scope 2) total approximately 0.4 million tons, or about 29% of all emissions. Other indirect emissions (Scope 3) associated with the Group s activities totaled approximately 0.97 million tons, accounting for about 71%. The CO2 emissions for purchased goods and services, account for 27.5% of emissions across the entire supply chain. The Group is continuing its efforts to reduce emissions by setting targets in cooperation with suppliers. It is providing technical assistance and making suggestions for the improvement of suppliers production processes in an effort to reduce material and energy use. In product development, the company is working to develop recycled plastics and design smaller and lighter products, which reduces the input of resources. In terms of the use of sold products, which accounts for 21.7% of emissions, the Group is working to develop features that encourage customers to save energy, in addition to reducing the power consumption of the products themselves. Konica Minolta will share information with relevant stakeholders in the future based on the results of these calculations and move forward with CO2 emissions management and reduction activities throughout the supply chain. * GHG Protocol: Guidelines for calculating and reporting greenhouse gas (GHG) emissions Overall View of CO2 Emissions Across the Entire Supply Chain of Konica Minolta Scope 3 (968 thousand tons) Scope 1 (171 thousand tons) Other categories (3,5,6,7,8,14,15) * 1 69 thousand tons Category 4 (Upstream Transportation and Distribution) 51 thousand tons* 2 Category 12 (End-of-Life Treatment of Sold Products) 64 thousand tons Category 2 (Capital Goods) 112 thousand tons Category 11 (Use of Sold Products) 296 thousand tons Total 1,367 thousand tons Production/R&D 123 thousand tons Sales and service 48 thousand tons Scope 2 (227 thousand tons) Production/R&D 189 thousand tons Sales and service 38 thousand tons Category 1 (Purchased Goods and Services) 376 thousand tons *1 Categories 3 (Fuel- and energy-related activities), 5 (Waste generated in operations), 6 (Business travel), 7 (Employee commuting), 8 (Upstream leased assets),14 (Franchises), and 15 (Investments) *2 CO2 emissions attributed to product distribution: 34 thousand tons Note: Figures do not necessarily match total because of rounding. Environmental Accounting Konica Minolta has implemented global-scale, consolidated environmental accounting in order to quantitatively assess the costs of environmental preservation in business operations and the benefits obtained from those activities. In fiscal 2014, costs increased 13% year on year to around 14.2 billion yen. The increase was mainly attributable to an increase in costs for the development of environmentally friendly products in the areas of business technologies and functional products. Investment was about 1.2 billion yen and was mainly related to next-generation products in the area of functional materials. R&D 45% Investment 1,202 million yen Pollution prevention 17% Preventing global warming 30% Environmental remediation 2% Social activity 1% R&D 48% Other 1% Pollution prevention 10% Preventing global warming 5% Resource Expenditures circulation 9% 14,243 million yen Upstream/ downstream 15% Upstream/downstream 14% Economic Benefits 22,391 million yen Preventing global warming 13% Resource circulation 73% Resource circulation 9% Administration 11% Note: Percentages do not necessarily total to 100 because of rounding. KONICA MINOLTA CSR REPORT

52 Expert Opinion of Konica Minolta s CSR Report We asked Yoshinao Kozuma, Professor of Economics at Sophia University, to give us some feedback on this report. His comments are presented below. We will use this feedback to improve our future CSR activities and our 2016 CSR Report. 1. Starting Declaration toward Sustainable Society Yoshinao Kozuma Professor, Faculty of Economics, Sophia University In recent years, Konica Minolta has been rapidly strengthening the creation of shared value as the direction for its CSR management. In this year s Message from the President, Mr. Yamana referred to the connection between the Group s long-term growth strategy and the creation of shared value with society, making that direction even clearer. This takes the management philosophy that Konica Minolta has aspired to since its founding, The Creation of New Value, beyond merely creating products and services that fulfill customer needs and shows that it includes a corporate commitment to pursue harmonious co-existence with society and the environment. I think that it is also Konica Minolta s new starting declaration toward sustainable society. This fiscal year, Konica Minolta also earned a variety of highly competitive external evaluations, including first place in the overall manufacturing sector on the Environmental Management Survey, first place in the overall ranking on the Quality Management Level Research, and selection as a Health and Productivity Management Brand by Japan s Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange. These achievements are the product of steady efforts and a progressive corporate mission, and they add a brilliant splash of color to the starting declaration. 2. Supporting Environmental Activities throughout the Value Chain The fiscal 2014 initiative I would most like to highlight is Konica Minolta s support for environmental activities throughout the value chain. Through this initiative, the Group shares the environmental management technology and know-how it has cultivated with suppliers and customers. The initiative consists of Green Supplier Activities for suppliers that agree with the intent of the activities and environmental management support for customers, even those with which it does not do business. The former strengthens relationships with suppliers while establishing a solid supply chain with excellent cost efficiency. The latter encourages the identification of business opportunities by increasing customers degree of trust in environmental management. These initiatives will contribute to the reduction of environmental impact throughout society and can be expected to have a large effect on Konica Minolta s creation of shared value in the future. 3. Handling Quantitative Data The change to G4 as the reporting guideline has brought about an improvement in information disclosure. I think that this will help with the development of the reporting structure. However, there are still a few issues in the handling of quantitative data. Indication of the number of employees by gender is standard in G4, and so the company needs to switch from the current proportional representation to a real number representation. Also, this fiscal year, the graphs of environmental data were moved to the end of the report, but you must review which graphs need to be included, since the current graphs do not necessarily illustrate the important issues laid out in the Medium-Term Environmental Plan Further, the fact that the next year s goals were not included alongside the goals and performance of environmental activities shows that there is room for improvement, as the Report should disclose the actual status of PDCA management. I hope that the company will consider making improvements regarding these issues in next year s report. 51 KONICA MINOLTA CSR REPORT 2015

53 External Assurance Konica Minolta engaged KPMG AZSA Sustainability Co., Ltd. to provide assurance on whether its CO2 emissions from procurement, production/research and development, product distribution, sales and service, and product usage; energy use; waste discharged externally from manufacturing; atmospheric emissions of volatile organic compounds (VOCs); and water consumption have been measured, gathered and disclosed in accordance with the criteria set by the Group. Period: March to June 2015 On-site audit of the Tatsuno Factory of Konica Minolta Supplies Manufacturing Comments from the Assurance Provider This CSR report is composed of material CSR themes identified based on a materiality analysis. I think that it has become more focused on issues that are important for Konica Minolta. The report should include an explanation of the kinds of policies, goals, and targets that have been established for each material theme as well as the degree of achievement at present. Some parts of the goals and targets are not very clear for several of the material themes, and I hope that this will be addressed from the next CSR report onward. In fiscal 2014, the system for gathering environmental data was updated, including the adoption of a function to detect Naomi Sugo, KPMG AZSA Sustainability Co., Ltd. outliers. I think this has made a stronger system for gathering more precise data. As the types of products produced and business sites change, one challenge is how to reflect those changes in a timely manner in the scope of data collection. The scope of energy usage data was expanded this year to include energy usage at sales and service sites outside Japan, and the gender percentages for employees and the percentage of female managers are now reported on a global basis. I think that this gives a clearer picture of the Konica Minolta Group overall. KONICA MINOLTA CSR REPORT

54 KONICA MINOLTA, INC Marunouchi, Chiyoda-ku, Tokyo , Japan For inquiries CSR, Corporate Communications & Branding Division Phone: FAX: BCD